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    Wall Street Moves In: Cantor Fitzgerald, FalconX, and Prediction Markets' Institutional Moment

    Cantor Fitzgerald, FalconX, and Phillip Capital all joined Kalshi's institutional stack in September 2026, the latest in a year-long Wall Street buildout.

    By Prediction Markets US News DeskWednesday, August 19, 20269 min read
    Wall Street Moves In: Cantor Fitzgerald, FalconX, and Prediction Markets' Institutional Moment

    For years, institutional investors watched prediction markets from a safe distance. The contracts were intriguing as information signals — real-time, crowd-sourced probability estimates on everything from Federal Reserve decisions to championship outcomes. But actually participating was a different matter. The order books were too thin to absorb institutional position sizes. The infrastructure was unfamiliar. The process of opening new accounts and integrating new systems didn't pencil out for portfolio managers allocating hundreds of millions of dollars.

    That calculus changed in 2026, and September accelerated the shift to a new pace. Three significant institutional access milestones arrived in rapid succession: Cantor Fitzgerald became one of the first full-service investment banks to launch institutional block trading on Kalshi; FalconX, one of the largest digital asset prime brokers, integrated Kalshi event contracts into its existing institutional execution stack via a partnership with Kemet; and Phillip Capital, a registered futures commission merchant, announced that its clients can now clear Kalshi event contracts through existing FCM relationships. Together, they represent a structural turning point — prediction markets are no longer an interesting novelty for Wall Street. They are becoming operational infrastructure.

    Cantor Fitzgerald: The Investment Bank Arrives

    In August 2026, Cantor Fitzgerald & Co. announced that it had become one of the first full-service investment banks to provide institutional clients with access to block trading in event contracts on a CFTC-regulated exchange. Under the partnership, Cantor acts as an introducing broker for approximately 3,000 institutional clients — hedge funds, family offices, and asset managers — arranging and facilitating institutional-size block trades on Kalshi.

    "We're just helping to bring our clients — the biggest institutions — into that space," Brandon Lutnick, Chairman of Cantor Fitzgerald LP, said in a Bloomberg Television interview in September. "We think it should be great for both sides."

    Cantor isn't operating alone on the market-making side. Susquehanna International Group's prediction market division, Susquehanna Predictions, is serving as the primary liquidity provider for the block trading program. "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. "We are able to price and execute custom, tailored contracts for institutional counterparties desiring to hedge both general market and bespoke industry risk currently unserved by traditional insurance markets."

    The mechanism that makes this work is block trading — a standard institutional tool in traditional markets that prediction markets are now incorporating for the first time at scale. Unlike retail orders that execute on the central order book, block trades allow large participants to transact privately, away from the public market. That means a hedge fund can take a meaningful position on a Federal Reserve rate decision without moving the price against itself — a basic operational requirement for any institutional market.

    "Prediction markets are emerging into a credible institutional asset class, and firms that engage early will help shape the market structure, liquidity and execution standards that underpin its growth," said Matt DeCicco, Managing Director and Head of Digital Assets for Global Markets at Cantor.

    FalconX and Kemet: Prediction Markets in the Institutional Stack

    Two weeks before Cantor's announcement made headlines, another institutional infrastructure breakthrough arrived more quietly. Digital asset prime brokerage FalconX — a minority investor in execution platform Kemet — announced a collaboration to expand institutional exposure to Kalshi event contracts through a technically distinct but equally significant route.

    Kemet's platform provides FalconX with the infrastructure to access Kalshi, and the integration does something particularly important: it routes Kalshi event contracts through the same algorithms, the same book, and the same risk models as options, perpetual futures, and spot digital asset positions. There is no separate integration, no separate interface, no separate account.

    "For prediction markets to reach their full potential with institutional participants, they need to fit into the same execution stack and risk systems institutions rely on," said Andy Ross, Head of Institutional at Kalshi.

    That integration standard is precisely what Cantor's block trading arrangement also achieves, albeit through a different mechanism. The common thread: prediction market event contracts must work the way institutional investors already work, or institutional capital won't flow.

    Phillip Capital: The FCM Gateway

    Announced September 15, Phillip Capital's partnership with Kalshi adds the third dimension of September's institutional wave. As a registered futures commission merchant, Phillip Capital offers clients the ability to execute Kalshi trades through their preferred trading platform while clearing the activity through an existing FCM relationship — the basic operational unit of institutional futures participation.

    The significance is practical. Dozens of hedge funds and asset managers already have standing FCM accounts. FCM relationships mean cleared positions, consolidated reporting, established credit lines, and margin management that institutions understand. Phillip Capital expects to clear the full range of eligible Kalshi contracts, without limiting its offering to specific market categories.

    "The ability to incorporate Kalshi event contracts into existing trading, hedging and portfolio-management frameworks will allow participants to evaluate and manage risk more holistically," the firm said in its announcement, adding that the approach "potentially reduces basis risk and enables more precise hedging of complex economic and business outcomes."

    The Wave That Preceded September

    These three partnerships don't exist in isolation. They are the latest arrivals in an institutional buildout that has been accelerating throughout 2026.

    In May, Kalshi announced a $1 billion Series F funding round at a $22 billion valuation, led by Coatue with participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. Kalshi disclosed at the time that institutional trading volume had surged 800% over the prior six months, and that annualized trading volume had grown from $52 billion to $178 billion.

    That capital has funded the institutional infrastructure now coming online. The major milestones of 2026, in order:

    Interactive Brokers (May 2026) launched a unified prediction market interface allowing clients to trade across Kalshi, CME Group, and ForecastEx from a single platform — no separate accounts, no separate funding. CEO Milan Galik described it as "the convenience our clients are used to when trading US stocks or options."

    Tradeweb (June 2026) added a dedicated Kalshi pricing page to its institutional platform, placing prediction market event contract data alongside the macro risk tools institutional traders already use daily. The companies are also exploring an institutional-focused execution platform for event contracts.

    Trading Technologies (June 2026), one of the most widely used institutional futures trading platforms globally, announced Kalshi connectivity for its professional trading interface — bringing event contracts into the same execution environment used by professional futures traders worldwide.

    Talos (July 2026) integrated Kalshi event contracts and perpetual futures into its institutional digital asset trading infrastructure. Using the same Talos interface already used for digital assets, select institutional clients can trade Kalshi's event contracts and crypto perpetuals with no separate integration required.

    DoubleZero (August 2026) launched a low-latency Kalshi market data feed on its dedicated fiber network, purpose-built for high-frequency institutional participants who require the same market data infrastructure they use in traditional markets.

    Why the Infrastructure Unlocks Institutional Capital

    Three friction points have historically kept institutional money on the sidelines of prediction markets. All three are being solved simultaneously.

    Scale. Retail-facing order books cannot absorb institutional position sizes without significant price impact. A hedge fund taking a position that represents a meaningful percentage of fund capital would move the market substantially against itself before the order filled. Block trading — enabled by Cantor's partnership with Kalshi — solves this directly. Large orders execute privately. The market doesn't move.

    Infrastructure familiarity. Portfolio managers don't build separate systems for every new asset class. Institutional capital follows institutional workflows. Integrations with Trading Technologies, Talos, Tradeweb, and Interactive Brokers place Kalshi event contracts inside interfaces that institutional traders already run for equities, futures, and options. The Kemet integration with FalconX goes further: event contracts now live in the same algorithm and risk stack as options and perpetuals. There is no conceptual barrier.

    Liquidity. Susquehanna International Group became Kalshi's first institutional market maker in September 2025, committing to provide approximately 30 times the liquidity previously available in select markets and establishing a dedicated prediction market trading desk. Susquehanna Predictions is now deepening that commitment by serving as the liquidity provider for Cantor's entire block trading program. When large orders arrive, there is a counterparty.

    What Institutions Are Actually Trading

    The institutional use case in prediction markets is not sports. The institutional use case is macro risk management — event contracts on Federal Reserve decisions, economic data releases, regulatory outcomes, and election results that directly affect the value of traditional fixed income, equity, and credit portfolios.

    Prediction markets offer something that doesn't exist in any other tradeable form: a continuous, market-implied probability estimate on the specific questions driving portfolio risk. As Tradeweb's platform leadership noted when announcing the Kalshi data integration: "Prediction markets have become a real-time gauge of how investors price risk across the global economy. Our clients want access to that signal within the workflows they already use."

    September 2026's FOMC meeting — with prediction markets pricing an approximately 87% probability of a 25-basis-point rate hike — is the canonical example. That probability signal is market-derived, continuously updated, and tradeable. A fixed income portfolio manager who wants to hedge policy risk can now do so through a regulated CFTC exchange, using the same prime broker, FCM, and execution terminal they already operate.

    This is the institutional prediction market use case: not speculation on outcomes, but real-time risk pricing on events that matter to traditional portfolios.

    Frequently Asked Questions

    What is block trading in prediction markets?

    Block trading allows large institutional orders to execute privately, outside the central order book, so that a large position doesn't move the market price against the buyer before the order fills. Cantor Fitzgerald's partnership with Kalshi specifically enables block trading for institutional clients, with Susquehanna Predictions providing pricing and liquidity on the other side of those trades.

    What is an introducing broker in this context?

    An introducing broker (IB) arranges client access to an exchange without holding client funds directly. Under the Cantor/Kalshi arrangement, Cantor acts as the IB — introducing its institutional clients to Kalshi's CFTC-regulated exchange and facilitating block trade execution, while Kalshi operates the underlying exchange.

    Are prediction markets regulated for institutional use?

    Kalshi is a federally regulated Designated Contract Market (DCM) and Designated Clearing Organization (DCO) under the Commodity Futures Trading Commission. This regulatory structure is the same framework institutions use for futures and options. That equivalence is what makes institutional participation feasible through established FCMs, IBs, and prime brokers.

    Which prediction market platforms are institutional investors using?

    The majority of US institutional activity flows through Kalshi, which holds both DCM and DCO status under the CFTC. Interactive Brokers also provides unified access to Kalshi, CME Group event contracts, and ForecastEx through a single platform.

    What events do institutional prediction market traders focus on?

    Institutional participants primarily focus on macroeconomic events — Federal Reserve rate decisions, employment data, GDP releases, regulatory outcomes, and election results. These are the events most directly connected to the risk factors that drive traditional portfolio returns.

    The Bottom Line

    Prediction markets spent five years proving they could exist within a federal regulatory framework. The work of 2026 is proving they can function as a genuine institutional asset class. Cantor Fitzgerald's block trading launch — alongside FalconX, Phillip Capital, Tradeweb, Talos, Trading Technologies, Interactive Brokers, and DoubleZero — marks the moment the latter phase has definitively begun.

    Institutional money follows institutional infrastructure. The infrastructure is here.

    Track live prediction market prices on Federal Reserve decisions, economic data, and major market events at PredictionMarkets.US.

    Sources

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