Wall Street’s biggest names are quietly building a bridge into a market once dominated by retail bettors. Cantor Fitzgerald is preparing to open Kalshi prediction markets to roughly 3,000 institutional clients, giving hedge funds and other large investors a way to place sizable, privately negotiated trades on event contracts through a regulated U.S. exchange. It’s a move that signals prediction markets are no longer just a playground for casual traders betting on elections or sports outcomes.
Summary
Key takeaways
- Cantor Fitzgerald plans to give about 3,000 institutional clients access to large block trades on Kalshi’s event contracts.
- Kalshi is a CFTC-regulated exchange, and Susquehanna International Group serves as its market maker, supplying pricing and liquidity.
- Cantor will act as the broker, arranging and executing trades on behalf of clients, and completed its first block trade earlier this year.
- Cantor has also partnered with Interactive Brokers to widen its reach among professional traders and hedge funds.
- Susquehanna’s Joe Grubb expects “large institutional risk transfer” to be the next major growth area for prediction markets.
Cantor Fitzgerald Expands Institutional Access to Kalshi Prediction Markets
Cantor Fitzgerald is positioning itself as one of the first full-service investment banks to hand institutional clients direct access to block trades in event contracts on a regulated exchange. The firm plans to extend this access to roughly 3,000 institutional clients, according to a company statement, marking a notable shift in how large financial players might use platforms like Kalshi going forward.
This isn’t a small experiment. It’s a structural bet that Cantor Fitzgerald institutional access to event-driven markets can become a mainstream part of how sophisticated investors manage exposure to real-world outcomes — from economic data releases to weather patterns.
Block Trades Facilitate Large-Scale Institutional Participation
Block trades are large, privately negotiated transactions typically executed away from public order books to avoid moving prices unexpectedly. They’re a familiar tool for big Wall Street firms, and Cantor is now bringing that mechanism into prediction markets. The firm completed its first block trade on Kalshi earlier this year, according to CNBC, a milestone that laid the groundwork for the broader rollout now underway.
In this arrangement, Cantor Fitzgerald acts as the broker — the party that arranges and executes trades for clients — rather than the counterparty absorbing the risk itself. That distinction matters because it means Cantor is essentially opening a door for its institutional client base without taking on the market-making burden itself.
Kalshi’s Regulatory Framework and Market Structure
Kalshi operates as a CFTC-regulated exchange specializing in event contracts, which puts it in a different regulatory category than many crypto-native or offshore prediction platforms. That regulatory standing is central to why a firm like Cantor is willing to route institutional money through it in the first place.
CFTC-Regulated Event Contracts and Market Maker Role
Pricing and liquidity for these institutional trades come from Susquehanna International Group, which functions as Kalshi’s market maker. Susquehanna’s involvement gives institutional clients the confidence that large trades can actually get filled without wild price swings — a longstanding obstacle for prediction markets trying to attract serious capital.
Kalshi spokesperson Elisabeth Diana noted, per CNBC, that new markets requested by institutional clients would still need to go through the CFTC and require sufficient liquidity before launching. Diana also said clients have shown particular interest in Kalshi’s climate, weather and economic indicator markets — categories that lend themselves more naturally to institutional hedging than sports or entertainment contracts.
Shifting Landscape: From Retail Betting to Institutional Hedging
Prediction markets have long been treated as a retail-first product, built around sports outcomes, election results and pop-culture bets. That framing is starting to crack. Platforms like Kalshi and rival Polymarket built their early user base largely on those smaller, high-volume retail trades, but Kalshi in particular has been pushing to broaden its offerings toward institutional participants who see the format differently — as a venue for transferring risk rather than just placing a wager.
Growth Potential and Market Evolution
“We believe the next area of material growth for prediction markets will be large institutional risk transfer,” said Joe Grubb, head of business development at Susquehanna Predictions. That statement captures the strategic logic behind Cantor’s move: if institutions start treating event contracts the way they treat derivatives or futures, the addressable market for platforms like Kalshi could expand well beyond its current retail base.
Pascal Bandelier, co-CEO and global head of equities at Cantor, framed the timing around a liquidity gap that’s finally closing. “Prediction markets are growing rapidly, but institutional participation has not kept pace because investors have lacked the ability to transact at scale on a regulated exchange,” Bandelier said. “The liquidity is here.”
Cantor isn’t stopping at its own client base. The firm has also partnered with Interactive Brokers, whose platform reaches professional traders, hedge funds and other sophisticated investors — a second channel designed to funnel institutional volume toward Kalshi’s event contracts.
Why does this matter beyond Cantor’s balance sheet? If institutional risk transfer genuinely becomes a growth pillar for Kalshi prediction markets, it reshapes the competitive picture for the entire category. A platform that can host both retail sports bettors and hedge funds hedging economic exposure occupies a different market position than a niche betting app — and that could pressure competitors like Polymarket to pursue similar regulatory and institutional pathways of their own.
The involvement of established players like Cantor Fitzgerald and Susquehanna also lends a layer of credibility that pure retail platforms often struggle to earn. When a firm known for institutional-scale execution starts routing hedge fund money through event contracts, it signals to the broader market that CFTC-regulated prediction trading has crossed some threshold of legitimacy — even if the long-term scale of that institutional appetite is still being tested in real time.
FAQ
What role does Cantor Fitzgerald play in Kalshi prediction markets?
Cantor Fitzgerald acts as the broker arranging and executing block trades for roughly 3,000 institutional clients on Kalshi.
How is liquidity provided in Kalshi’s institutional trades?
Liquidity and pricing are provided by Susquehanna International Group, which acts as Kalshi’s market maker.
What is the regulatory status of Kalshi’s prediction markets?
Kalshi operates as a CFTC-regulated exchange specializing in event contracts.
Why is institutional access to prediction markets significant?
Institutional access allows large block trades and risk hedging at scale on a regulated exchange, expanding prediction markets beyond retail betting.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
