BitGo, Susquehanna Crypto offering institutional OTC access to prediction markets

BitGo Prime and Susquehanna Crypto have partnered to offer institutional clients over-the-counter (OTC) access to prediction market trades. This new offering allows large investors, including hedge funds, family offices, and high-net-worth individuals, to trade event contracts using digital assets held on BitGo’s platform as collateral, bypassing retail platforms and the need to convert crypto to cash.

Key Developments and Structure

Susquehanna Crypto will provide liquidity, while trades will be executed bilaterally through BitGo’s OTC desk, adhering to standard derivatives documentation. This structure mirrors traditional institutional derivatives trading, where assets remain in custody and positions are collateralized, a significant departure from retail prediction market platforms that typically require pre-funding and offer limited institutional integration.

The initiative aims to bridge the gap between institutional finance and the rapidly growing prediction market sector. Prediction markets have experienced substantial growth, with trading volumes reaching an estimated $40 billion–$45 billion in 2025, a significant increase year-over-year, driven by surging retail participation and platforms like Polymarket and Kalshi.

Institutional Adoption and Challenges

Institutional investors are increasingly utilizing prediction markets as a hedging tool to manage tail risks associated with events like elections, policy changes, or macroeconomic shifts. These markets offer a unique way to price and hedge against discrete, real-world outcomes that are difficult to cover with traditional financial instruments.

Despite growing institutional interest, broader adoption has been hindered by infrastructure limitations and regulatory uncertainty. Regulatory fragmentation, particularly in the U.S., where platforms operate under different oversight frameworks (e.g., CFTC for Kalshi, offshore for Polymarket), has complicated access for domestic institutional capital. This has prompted many firms to seek alternative structures that align with existing compliance standards.

The new offering from BitGo and Susquehanna Crypto is designed to address these challenges by integrating custody, collateral management, and OTC execution into a unified workflow. By enabling trading against crypto collateral without moving assets off-platform, the partnership seeks to align prediction market infrastructure with that already used by institutions in other asset classes.