Polymarket closes first block trade in push for institutional adoption

Prediction market platform Polymarket has completed its first block trade on a contract related to AI computing infrastructure, which the company shared exclusively with CNBC.

The six-figure transaction was between digital asset broker FalconX and trading technology startup Anera Labs. FalconX and Anera Labs traded in a contract on the Ornn Computing Price Index, a tracking benchmark. Nvidia’s H100 GPU chip rental pricing.

“Prediction markets are emerging as one of the strongest venues for institutional block trading, and this transaction is testament to that,” Polymarket head of institutional liquidity Brooke Rizzetto said in a statement. “Seeing an institutional counterparty use Polymarket to hedge against true GPU computing risk at scale is exactly the future we are building for.”

Block trades are large, privately negotiated transactions that are typically executed outside the public market to avoid price fluctuations. These are common occurrences in stocks on major trading desks on Wall Street.

The announcement comes just a month after Polymarket’s chief rival, Kalshi, completed its first block trade on any prediction market platform. However, Polymarket said in a statement that this is the first institutional prediction market trade on the chain as the company’s international platform runs on the Polygon blockchain.

Polymarket’s international exchange is separate from its US platform, which launched in December after it was banned from operating in the country in 2022 for failing to properly register with regulators. The Commodity Futures Trading Commission, the federal regulator of prediction markets, and the Justice Department dropped their investigations into the company in July without charging any charges. The CFTC regulates Polymarket’s US platform.

While retail investors have driven prediction market volumes to soar over the past year, platforms are increasingly looking to institutional investors as the next venue for growth. FalconX will serve as an exclusive market maker for future block trades on Polymarket platforms, the company said.

“This transaction underscores the growing demand for financial infrastructure in computing,” Ravi Doshi, co-head of global markets at FalconX, said in a statement. “We are proud to partner with pioneers like Polymarket to bring deeper liquidity and clearer price discovery to this important, rapidly evolving commodity market.”

Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.