BitGo and Susquehanna Crypto announced a new partnership on Tuesday to provide institutional clients with over-the-counter access to prediction markets. This collaboration enables hedge funds and high-net-worth investors to trade event contracts using digital assets held on BitGo as collateral. The move targets investors who require structured execution without converting their crypto holdings into cash.
Trades will be executed bilaterally through BitGo’s over-the-counter desk with liquidity provided by Susquehanna Crypto. The firms stated that transactions will follow standard derivatives documentation frameworks to ensure regulatory alignment. Investors utilize over-the-counter desks primarily to trade large positions without disrupting the market or exposing strategy.
This structure mirrors how institutions already trade traditional derivatives where assets remain in custody. In contrast, most prediction market activity currently occurs on retail platforms requiring pre-funding and offering limited integration. The new offering avoids the asset liquidation typically associated with collateralized trading on consumer-facing exchanges.
Institutional investors are increasingly adopting prediction markets as hedging tools against specific event outcomes. They can take positions on election results, policy decisions, or macroeconomic shifts to offset risks in broader portfolios. These markets offer a method to hedge tail risks that remain difficult to capture with traditional equities or options.
Trading volumes in this sector topped roughly $40 billion to $45 billion in 2025 according to market data. Participation surged several-fold on a year-over-year basis as retail platforms like Polymarket and Kalshi gained traction. Despite this growth, institutional interest has begun to build even as infrastructure and regulatory uncertainty limit adoption.
Regulatory fragmentation has slowed widespread adoption across different jurisdictions. In the United States, platforms like Kalshi operate under Commodity Futures Trading Commission oversight while others remain offshore. That dynamic has pushed many firms to explore alternative structures that better align with existing compliance frameworks.
The companies stated the new offering is designed to address those specific infrastructure gaps directly. By combining custody, collateral management, and over-the-counter execution into a single workflow, they aim to streamline the process. This allows investors to trade against crypto collateral without moving assets off-platform during the settlement cycle.
Industry observers note that Wall Street’s move into crypto reflects years of behind-the-scenes work on modernizing financial infrastructure. Morgan Stanley’s head of digital assets, Amy Oldenburg, said banks are expanding into the sector after years of development. Upgrading decades-old banking systems remains a major hurdle even as interest in tools like stablecoins grows.
The BitGo and Susquehanna partnership signals a maturation of the prediction market ecosystem for professional traders. Bringing these markets closer to the infrastructure institutions already use in other asset classes could accelerate participation significantly. Future developments will likely focus on further integration with traditional finance settlement rails to enhance liquidity.
