- Wintermute, handling $3.5 trillion in annual crypto volume, has entered prediction markets as a liquidity provider.
- The firm aims to reduce spreads and improve the reliability of market-implied probabilities for event contracts.
- Leading platforms Kalshi and Polymarket see nearly $5.8 billion in weekly volume combined.
- Prediction markets are evolving from niche forecasting tools into broader venues for trading event risk.
Major crypto trading firm Wintermute announced on Friday it is now providing institutional liquidity on prediction markets, signaling a significant expansion for this growing financial niche. The company, which manages a staggering $3.5 trillion in annual trading volume, said it will offer two-sided markets across event contracts on leading platforms.
Jake Ostrovskis, head of OTC trading at Wintermute, stated these markets have the “demand profile of a major asset class but the liquidity profile of an early-stage one.” Consequently, the firm will post continuous bid and offer prices to add much-needed depth. This activity helps reduce spreads and supports larger trade sizes, ultimately improving the signal embedded in market prices.
The move leverages Wintermute’s existing crypto infrastructure across spot, derivatives, and DeFi markets. Meanwhile, prediction markets are rapidly moving from a niche forecasting tool into a broader venue for trading event risk.
The two dominant platforms, Kalshi and Polymarket, have a combined notional weekly volume of around $5.8 billion, according to DeFiRate. Kalshi, which is regulated by the CFTC, commands about 70% of this volume. Politics and sports currently dominate the betting activity on both venues.
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