Crypto liquidity provider and trading firm Wintermute says it is providing liquidity to prediction markets as the industry continues to expand.
The company, which processes $3.5 trillion in annual trading volume, he said on Friday that it is expanding its institutional trading into prediction markets and will provide “double-sided markets through event contracts on leading venues,” without specifying the platforms.
Jake Ostrovskis, head of OTC trading at Wintermute, said prediction markets have the “demand profile” of a major asset class but the liquidity profile of “an early stage one”.
“For these markets to become a reliable source of real-time probability estimates, they need sustained bilateral liquidity. This depth narrows spreads, supports larger trade sizes and in turn improves the signal embedded in market prices,” he added.
Wintermute said the prediction markets are moving from a “niche forecasting tool” to a broader venue for trading event risk, and will post ongoing bids and offers for event contracts.
Source: Wintermute
This helps reduce spreads, supports larger trade sizes and improves the reliability of market-implied probabilities, it said.
Wintermute added that the market also overlaps with its existing crypto infrastructure, as it already operates spot markets, derivatives, decentralized finance and OTC crypto markets.
The move could accelerate integration between prediction markets and broader DeFi protocols for collateral reuse, returns on locked-in strategies or Oracle’s data sources derived from market price predictions.
Related: Kalshi backs a prediction market lobbying group with a former Trump official
The two leading prediction markets, Kalshi and Polymarket, have a nominal weekly volume of around USD 5.8 billion, with almost 400,000 active markets and 42.7 million weekly transactions, according to for DeFiRate.
Kalshi, which is regulated by the Commodity Futures Trading Commission, has the largest market share by volume at 70%. Politics and sports dominate betting on both platforms.
Comparison of statistics between Kalshi (green) and Polymarket (purple). Source: DeFiRate
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