Wintermute Enters Prediction Market...Kalshi and Polymarket's Stakes Grow

▲ Prediction Market, Dollar (USD), Bitcoin (BTC)/AI Generated Image

Wintermute, which processes an annual trading volume of $3.5 trillion, has entered the prediction market as a liquidity provider, increasing the likelihood that the event betting market will become more deeply connected to cryptocurrency infrastructure and decentralized finance (DeFi).

According to crypto media outlet Cointelegraph on June 1 (local time), Wintermute, a cryptocurrency liquidity provider and trading firm, announced that it would supply liquidity to the growing prediction market. Wintermute explained that it plans to provide two-way markets for event contracts on major exchanges but did not specifically name the target platforms for trading.

Jake Ostrovskis, Head of OTC at Wintermute, assessed that while the prediction market has a demand structure similar to major asset classes, it is still close to an nascent market in terms of liquidity. He stated, “For this market to become a reliable source of real-time probability estimates, continuous two-way liquidity is needed. This depth narrows spreads, supports larger trade sizes, and consequently improves the signals embedded in market prices.”

Wintermute believes that the prediction market is shifting from a niche forecasting tool to a broader market for trading event risks. The company aims to help reduce spreads, support large trades, and improve the reliability of market-implied probabilities by continuously quoting bid and ask prices across event contracts.

This entry aligns with Wintermute's existing infrastructure in crypto spot, derivatives, decentralized finance, and OTC markets. Cointelegraph reported that the combination of prediction markets and decentralized finance protocols could expand into areas such as collateral re-use, yield strategies based on locked capital, and oracle feeds utilizing prediction market prices.

According to DeFiRate, the two major prediction markets, Kalshi and Polymarket, have a nominal weekly trading volume of approximately $5.8 billion, with about 400,000 active markets and 42.7 million weekly transactions. Kalshi, regulated by the U.S. Commodity Futures Trading Commission (CFTC), holds the largest market position with a 70% share by trading volume, and political and sports-related betting are dominant on both platforms.

Cointelegraph pointed out that Wintermute's entry is a move to fill the liquidity gap in the expanding prediction market. As the prediction market grows beyond a simple forecasting tool into an event risk trading market, the participation of a large liquidity provider can simultaneously drive increased trading volume and improved price reliability.

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