Wintermute Trading has confirmed entry into prediction markets, providing continuous two-sided liquidity on Kalshi and Polymarket. The institutional market maker, which processes over $3.5 trillion in annual trading volume across 70-plus exchanges, is deploying the same infrastructure it uses for crypto spot and derivatives to event contracts. The move follows recent entries by Jump Trading, Susquehanna, and Galaxy Digital, while Citadel Securities has acknowledged potential interest.
Prediction markets now exceed $20 billion in monthly trading volume but suffer from wide spreads and limited depth. Wintermute’s head of OTC trading says the sector has demand resembling a major asset class but liquidity typical of early-stage markets. The firm views this as “event risk” trading, allowing institutions to hedge or gain exposure to specific catalysts like policy decisions and elections without proxy instruments. Prime brokers Clear Street and Marex have already built clearing infrastructure for hedge fund access.
FXnCO Insight
Institutional market maker entry signals prediction markets are maturing into a tradeable asset class—watch for tightening spreads and deeper liquidity pools that could improve price discovery for event-driven trading strategies.
Source: Finance Magnates