Institutional clients can now trade prediction market contracts through an OTC structure that allows execution directly from custody accounts, without using retail platforms.
The setup, launched by BitGo and Susquehanna Crypto, combines bilateral execution, digital asset collateral and standard derivatives documentation.
How the Structure Works
The setup follows a familiar model for institutional derivatives trading. Instead of using public exchanges, clients execute trades bilaterally through an OTC desk.
Positions can be collateralized using existing digital asset holdings, including BTC, ETH or stablecoins, without converting to fiat. Trades are documented under standard derivatives agreements, aligning the structure with existing institutional trading workflows.
The setup also has limitations. OTC trading relies on bilateral pricing rather than open market liquidity, which can affect transparency and pricing dynamics. It also does not resolve the broader regulatory uncertainty around prediction market contracts, which remains unsettled in several jurisdictions.
- BaFin MiCA Approval Follows VARA Broker-Dealer License for BitGo in Dubai
- BaFin Grants MiCA License to BitGo Europe for EU Crypto Operations
- BitGo Expands Support for Institutions: Launches Crypto OTC Trading Desk
Addressing Access Constraints
Until now, institutional participation in prediction markets has been limited by how these products are accessed. Most activity has taken place on retail-focused platforms, requiring users to manage accounts, custody and funding separately from their existing trading setups. For larger firms, this has created operational friction.
The new service allows clients to trade from custody accounts they already use, reducing the need to move assets or rely on retail interfaces.
“Prediction markets have developed into an increasingly relevant venue for price discovery, but institutional access has remained limited,” said Matt Ballensweig, Global Head of Trading at BitGo.
What It Means for Brokers and Infrastructure Providers
For brokers and fintech firms, the development is practical rather than structural. It shows that prediction market contracts can be offered through existing models such as OTC execution, custody-based collateral and standard documentation, rather than requiring new platforms.
This may lower the operational barrier for firms considering how to offer or support these products. Institutional trading volumes in prediction markets remain limited, but the availability of familiar execution and custody structures gives firms another way to evaluate participation.
