Wintermute has announced its entry into the prediction market, offering bid and ask quotes on active event contracts across major platforms. The company disclosed that this initiative will focus on improving liquidity for popular contracts, alleviating issues of insufficient order book depth and weak execution prices.
Expansion of services to event contracts
The company stated that prediction markets now require trading infrastructure comparable to that of digital asset markets, including execution, custody, collateral management, and risk control. Wintermute believes its existing system can directly support trading of these event contracts.
Wintermute stated that the company has processed over $5 trillion in trading volume across more than 50 digital asset exchanges. This experience will be leveraged to provide more consistent two-sided liquidity, helping users achieve tighter bid-ask spreads and deeper order books on active contracts.
Trading volume in the industry is rapidly expanding.
According to industry data cited in the announcement, the cumulative trading volume of prediction markets is projected to exceed $60 billion by 2026, with monthly trading volumes reaching $2 billion to $2.5 billion.
Among these, Polymarket generated over $3 billion in trading volume on contracts related to the 2024 U.S. presidential election, demonstrating user demand for trading on real-world events. Another platform, Kalshi, is also expanding rapidly. According to data cited in the announcement, Kalshi’s annualized trading volume rose from $52 billion to $178 billion over the six months ending early 2026, and currently accounts for over 90% of all prediction market activity in the United States.
Thin order book amid regulatory pressure
In addition to increased trading activity, capital is also flowing into this space at a faster pace. The announcement notes that Kalshi recently completed a $1 billion Series F funding round, reaching a $22 billion valuation, indicating a significant surge in institutional investor interest in this sector.
For users of platforms like Kalshi and Polymarket, the entry of professional market makers first impacts the execution of large orders. Wintermute believes that market makers can narrow the bid-ask spread and improve the efficiency of trading larger positions.
This is important because many prediction markets have long suffered from thin order books. In particular, for event contracts such as central bank decisions, users placing large orders often encounter insufficient liquidity and unfavorable execution prices. A report cited in the announcement also states that between April 2024 and April 2025, approximately $40 million in arbitrage profits on Polymarket originated from pricing discrepancies.
Additional information: The U.S. Commodity Futures Trading Commission (CFTC) issued a notice of proposed rulemaking on March 16, 2026, focusing on manipulation risks and the regulation of event contracts. The announcement also stated that at least 11 states have advanced legislative measures targeting prediction markets, with unregulated prediction markets potentially leading to an estimated $600 million in lost tax revenue.