DRW, Wintermute Push Into Prediction Markets as Institutional Capital Flows In
Summary
- DRW has recently started building a dedicated trading desk for prediction markets.
- Polymarket recorded as much as $40 billion in trading volume across political, economic and sports markets last year.
- As prediction markets grow, traditional finance quant trading strategies are spreading into the sector.
Forecast Trend Report by Period
Major quant trading firms are moving into prediction markets such as Polymarket and Kalshi.
DRW has recently started building a dedicated trading desk for prediction markets, CoinDesk reported on June 6. Crypto market maker Wintermute and IMC are also hiring for related roles.
Institutions are taking notice after a sharp rise in trading volume. Polymarket logged as much as $40 billion in volume across political, economic and sports markets last year. More recently, volume in markets tied to predicting the winners of the UEFA Champions League, NBA and NHL has exceeded $700 million.
Rather than trying to predict election or game outcomes themselves, these firms are targeting arbitrage opportunities created by price gaps between platforms. The market's growth is also driving the spread of quant trading strategies long used in traditional finance into prediction markets.
Uk Jin
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