London-based algorithmic trading firm Wintermute has begun providing two-way liquidity on major prediction market platforms, moving deeper into a sector that now sees more than $60 billion a year in event contract trading. The company said the platforms it is servicing together handle over $20 billion in monthly volume as of early 2026.
Wintermute’s role and expectations
Wintermute, which manages more than $3.5 trillion in annual trading volume across digital assets, will quote continuous bid and ask prices on event contracts.
The firm expects its systems to deliver:
- tighter spreads
- larger executable order sizes
- more stable transaction flows
Ostrovskis, Wintermute’s head of over-the-counter trading, said demand for prediction-based instruments is now comparable to that of larger asset classes, even though liquidity is still in the early stages of development. He argued that consistent two-way pricing can make these markets more reliable as real-time gauges of expected outcomes.
Broader institutional push
Wintermute’s move comes as other large trading firms deepen their exposure to event-based platforms.
- Jump Trading has reportedly taken market-making positions, including equity exposure, on Polymarket and Kalshi.
- Galaxy Digital has been evaluating similar arrangements on the same venues.
The expansion of these firms signals a shift toward more professionalised, high-frequency participation in prediction markets, aligning them more closely with traditional financial trading venues.
Growth of Polymarket and Kalshi
Polymarket and Kalshi have together processed more than $150 billion in lifetime trading volume as of April 2026. Their activity highlights growing adoption of:
- blockchain-based settlement
- stablecoin-denominated collateral
- automated resolution mechanisms for event outcomes
Volumes have risen rapidly. In the first quarter of 2026, Kalshi recorded about $33 billion in trading and Polymarket more than $26 billion. For the week ending 10 May, their combined volume exceeded $6 billion, pointing to sustained, high-frequency engagement.
Market structure and trading conditions
The arrival of specialist liquidity providers is reshaping market structure. Several high-frequency firms are reportedly receiving equity stakes in prediction platforms in exchange for maintaining order flow and liquidity.
This institutional presence is expected to:
- reduce trading costs through narrower spreads
- speed up how quickly new information is reflected in prices
- enable larger orders without causing sharp price swings
For active traders, that means fewer opportunities based on slow-moving prices or arbitrage between platforms, but a more robust environment for executing significant positions tied to macroeconomic events, policy decisions, or data releases.
Operational fit with digital asset markets
Wintermute said that the operational demands of prediction markets—execution, custody, margin management, and risk control—are similar to those in spot, derivatives, decentralised finance, and over-the-counter digital asset products.
According to the firm, this overlap allows it to extend its existing infrastructure into event-based contracts with limited additional build-out, reinforcing the view that these markets are converging with the broader digital asset ecosystem.
Integration with traditional finance
Beyond trading venues themselves, infrastructure providers such as Clear Street are building connectivity that links institutional clients directly to prediction markets.
Some asset managers and hedge funds are already using these platforms as an additional source of probability estimates alongside traditional indicators, particularly for events such as inflation releases or regulatory rulings.
As connectivity improves and more professional firms participate, prediction markets are increasingly positioned as a standard tool for information discovery and risk management, rather than a niche segment of the digital economy.
Want deeper context on this shift toward institution-grade markets? Explore how prediction markets could be reshaped by 2026.
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