Wintermute, the London-based algorithmic trading firm that handles over $3.5 trillion in annual volume, has officially entered the prediction markets space as a liquidity provider. The firm will quote continuous two-sided bid and offer prices across active event contracts on leading platforms, which together process more than $20 billion in monthly volume as of early 2026.
Jake Ostrovskis, head of OTC trading at Wintermute, said prediction markets exhibit demand characteristics typical of much larger asset classes while their liquidity infrastructure remains underdeveloped. “For these markets to become a reliable real-time source of probability estimates, they need sustained two-sided liquidity,” Ostrovskis explained. “That depth tightens spreads, supports larger trade sizes, and in turn improves the signal embedded in market prices. That is where Wintermute can add value.”
The move places Wintermute alongside digital asset peers such as Jump Trading, which reportedly provides market-making services to Polymarket and Kalshi in exchange for equity, and Galaxy Digital, whose CEO Mike Novogratz confirmed the firm is exploring similar arrangements. Prediction markets have surged in 2026, with cumulative trading volume surpassing $60 billion and monthly activity reaching $20–$25 billion. Kalshi, now accounting for over 90% of U.S. prediction market activity, recently completed a $1 billion Series F round at a $22 billion valuation.
Wintermute highlighted the significant overlap between prediction markets and digital asset infrastructure, citing the use of stablecoins, public blockchains, and crypto-native settlement systems. The firm noted that its existing capabilities in execution, custody, collateral management, and risk control across spot, derivatives, DeFi, and OTC trading translate directly to event-contract markets. As regulators increase scrutiny—including a CFTC Advanced Notice of Proposed Rulemaking on event-contract manipulation—improved liquidity from professional firms could address thin order books and reduce arbitrage inefficiencies, with one estimate placing $40 million in arbitrage extracted from Polymarket between April 2024 and April 2025.
