Prediction markets have attracted growing institutional interest as tools for price discovery around political, economic, and event-driven outcomes, but participation has remained largely confined to retail platforms with workflows that most institutional trading desks cannot operationally support. BitGo and Susquehanna Crypto are now attempting to close that gap with what they describe as the first OTC framework for trading prediction market contracts at institutional scale, collateralised with crypto and documented under standard ISDA derivatives agreements.
“What we’re trying to do is give institutional crypto participants who are already interacting with OTC digital asset markets – whether that’s trading spot or bilateral options on Bitcoin or ETH – the same experience and institutional-grade access to prediction markets, rather than having to deal with the more cumbersome, retail-oriented infrastructure that exists today,” says Matt Ballensweig, Global Head of Trading at BitGo.
Riskless principal, ISDA documentation, and a $100k floor
The structure places BitGo Prime – a US-based entity operating under the CFTC’s de minimis swap dealer exemption – between the client and the liquidity provider. Clients face BitGo Prime as counterparty; BitGo separately faces Susquehanna Crypto on the back end. BitGo describes its role as “riskless principal,” intermediating between the two sides without taking directional exposure.Clients must qualify as eligible contract participants – hedge funds, family offices, and ultra-high-net-worth individuals – and sign standard ISDA derivative documentation with BitGo Prime. Once onboarded, they can request a price on any listed market on Polymarket or Kalshi where BitGo judges there to be sufficient liquidity to support a trade. The minimum ticket size is $100,000.
“We’ll always find a price, but spreads will be wider on thinner markets,” Ballensweig tells TradingTech Insight. “It’s at BitGo’s discretion to decide whether a given market is liquid enough to price.”
The de minimis exemption allows BitGo Prime to transact up to $8 billion in annualised notional volume before needing to register as a swap dealer – the same framework under which it operates its existing bilateral options business on Bitcoin and other digital assets. Prediction market flow counts towards the same notional cap. Ballensweig says the longer-term plan is to register as a swap dealer to operate at greater scale.
Crypto collateral at the centre
The collateral framework is the offering’s most distinctive feature for institutional participants already holding digital assets. Clients can post USD, stablecoins, Bitcoin, or other major cryptocurrencies held in BitGo’s custody as collateral against prediction market positions, rather than liquidating crypto to fund trades directly on Polymarket or Kalshi.Contracts are fully funded by design, mirroring the underlying prediction market mechanics: capital is locked until expiry, at which point there is a binary outcome. Collateral does not earn interest in the current iteration, which Ballensweig acknowledges is a constraint the firm may revisit as the product matures.
From OTC voice to API to custom markets
Ballensweig outlines a three-phase roadmap. “The current launch is phase one: OTC, higher-touch, institutional clip sizes. Phase two involves adding venues beyond Polymarket and Kalshi as liquidity develops. Phase three would allow clients to create their own unlisted markets, defining custom event parameters while we work out how to price and hedge the exposure on the back end.”
The broader thesis is that there’s a significant amount of geopolitical and macro risk that institutional clients want to hedge or speculate on. “Traditionally that’s been done by looking at how equities, crypto, or other assets correlate to macro events, and then trading those securities as a proxy,” says Ballensweig. “What we’re enabling is the ability to just trade the event itself.”
The electronic access dimension is also on the roadmap. BitGo already operates a UI and API-based electronic trading platform for spot flow, and Ballensweig says the firm intends to systematise prediction market execution into that infrastructure to support programmatic and ultimately agentic participation. “It’s on our roadmap – probably a bit further out – but it’s something we’re planning to build natively into the platform,” he says.
Trading the event itself
The BitGo-Susquehanna partnership is the latest signal that prediction markets are transitioning from retail curiosity to investable infrastructure. The combination of ISDA documentation, crypto-native collateral, OTC execution, and a riskless-principal intermediary structure maps familiar derivatives-market mechanics onto an asset class that has, until now, lacked institutional plumbing.
Whether the broader institutional market is ready to treat event contracts as a standalone allocation rather than an opportunistic side bet remains to be seen. But as Ballensweig frames it: “Trading the probability of an event directly – rather than through a basket of correlated assets – will represent a meaningful shift in how capital markets are used to hedge and speculate. I don’t think that concept has fully landed at scale yet, but when it does, I think it’ll be significant.”
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