Galaxy Digital, the crypto-focused investment firm led by Mike Novogratz, is reportedly in advanced discussions to serve as a liquidity provider and market maker for two leading prediction market platforms: Polymarket a decentralized crypto-based platform and Kalshi a regulated U.S.-based exchange.
This move comes amid explosive growth in the prediction markets sector, which has amassed over $42.4 billion in cumulative trading volume since 2020, with a current market size estimated at around $9 billion.
By stepping in as a market maker, Galaxy would help ensure tighter spreads and deeper order books on these platforms, making it easier for traders to bet on real-world outcomes like elections, economic data, sports events, or cultural trends.
Polymarket and Kalshi currently dominate the space, handling billions in bets — Polymarket alone saw over $3.3 billion in volume during the 2024 U.S. election cycle. Prediction markets are gaining traction as “truth serums” for gauging public sentiment, with integrations into mainstream tools like Google Finance and even NHL betting partnerships.
Galaxy’s involvement could bridge traditional finance and crypto, positioning these markets as reliable barometers for everything from inflation forecasts to pop culture winners. While Polymarket operates on blockchain and has faced U.S. scrutiny, Kalshi is CFTC-regulated, allowing fiat bets.
Galaxy’s entry could help navigate these waters, especially as U.S. regulators warm to prediction markets post-elections. No formal agreements have been announced yet, but sources indicate talks are progressing quickly, potentially launching services in early 2026.
This aligns with Galaxy’s strategy to expand beyond spot trading into derivatives and niche markets. Mike Novogratz, views blend optimism about long-term adoption with pragmatic caution on short-term volatility.
He’s emphasized macro factors like Federal Reserve policy, institutional inflows, and regulatory clarity as major drivers, while noting the market’s current “sluggish” phase due to rebalancing by long-term holders.
Novogratz has refined his BTC forecasts multiple times this year, adjusting for economic realities like potential Fed dovishness under a new chair post-Jerome Powell’s term. He’s skeptical of ultra-bullish calls but sees upside from policy shifts.
Market consolidation after earlier gains; lighter leverage and slower institutional activity. Expects a rebound but not explosive highs without “crazy stuff” like premature Trump influence on the Fed or quick passage of the CLARITY Act (crypto market structure bill).
A highly dovish Fed appointment could trigger a “megacycle.” This would boost liquidity but risk U.S. economic stability and Fed independence. BTC could replace gold as a store of value with sustained adoption from institutions, nations, and younger generations. Driven by fiat debasement and BTC’s role as “digital gold.”
Novogratz is particularly bullish on ETH, viewing it as undervalued with strong utility in DeFi and staking. He’s highlighted emerging “ETH treasury” strategies by public companies as a growth catalyst.
Expects ETH to outperform BTC in the next 3-6 months, breaking above $4,000 by year-end from current levels around $3,000-$3,500. Reasons include a “really short” market low supply, powerful narratives around decentralization, and new ETH-holding corporates like SharpLink Gaming ($SBET).
Solana (SOL): Heavy Galaxy exposure; sees growth in new ecosystems but warns smaller players may struggle for “oxygen” as majors consolidate.
Hyperliquid (HYPE): Calls perp equity trading a “big idea” for leverage-hungry crypto users; predicts ecosystem boom.
Novogratz frames 2025’s crypto rally as powered by AI integration, eroding trust in traditional finance, and policy wins. Total market cap hit $4T earlier this year but has cooled.Institutional Adoption: “Institutions are here” – balance sheet buyers like BTC/ETH treasuries injecting billions.
Expects banks’ entry via new regs to accelerate this; crypto treasuries have “peaked” but will evolve into diversified reserves like ReserveOne. USD stablecoins will reinforce dollar dominance; FX markets could become “stablecoin markets” in under 5 years. Galaxy backs MiCAR-compliant euro stablecoins like EURAU.
Bi-partisan wins like the recent market structure bill are “huge”; full CLARITY Act passage could unleash “tremendous participation.” A dovish Trump-era Fed is the “biggest bull catalyst,” but risks inflation.
Galaxy’s pivoting BTC mining to AI data centers up to 2.5GW; AI drove much of 2025’s rally, with miners finding “better returns in AI than crypto.” Short-term “wet blanket” from holder diversification; needs retail “cavalry” and $BTC retake of $91K for momentum.
Global trust erosion post-GFC vibes underpins the bull case – “stay long crypto.” Novogratz’s track record is mixed – he nailed institutional inflows but missed some 2021-2024 calls.
Overall, he’s “long-term greedy” on crypto as a hedge against fiat debasement and a builder of the next financial system. For Galaxy ($GLXY) specifics, he stresses 2030+ horizons in crypto and AI.
