Cryptocurrency liquidity provider and trading firm Wintermute claims to be providing liquidity to prediction markets as the industry continues to evolve.
A company that handles $3.5 trillion in annual trading volume, he said on Friday that it is expanding its institutional trading into forecast markets and will provide “two-sided markets on lead event contracts,” without specifying platforms.
Jake Ostrovskis, head of OTC trading at Wintermute, said forecast markets have a “demand profile” of a mainstream asset class but a “startup profile” liquidity profile.
“For these markets to become a reliable source of real-time probability estimates, they need persistent bilateral liquidity. This depth tightens spreads, supports larger trade sizes, which in turn improves the signal embedded in market prices,” he added.
Wintermute said forecast markets are moving from a “niche forecasting tool” to the broader event risk trading space and will publish bid and offer prices on an ongoing basis for event contracts.
Source: Wintermute
This helps reduce spreads, support larger trade sizes and improve the reliability of market-implied probabilities, he said.
Wintermute added that the market also overlaps with existing crypto infrastructure as it already manages spot, derivatives, decentralized finance and over-the-counter cryptocurrency markets.
The move could accelerate the integration of prediction markets into broader DeFi protocols for reusing collateral, return strategies on locked capital, or Oracle data derived from market prediction prices.
Related: Kalshi supports a forecasting markets lobbying group with a former Trump official
The two leading forecast markets, Kalshi and Polymarket, have a notional weekly volume of approximately $5.8 billion, with almost 400,000 energetic markets and 42.7 million transactions per week, According to to 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.
Statistics comparison of Kalshi (green) and Polymarket (purple). Source: DeFiRate
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