Macro

Susquehanna Bets on Bitcoin to Swift Events, Raises Kalshi's Limit to $7M

Susquehanna launches event trading desk on Kalshi, betting on outcomes from Fed policy to pop culture, amid growing Wall Street interest.

By Alex P. Chase

4/3, 13:20 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Coinbase Global, Inc.
article-main-img

Key Takeaway

  • Susquehanna International Group launches a trading desk on Kalshi Inc. for events contracts, betting on outcomes from Fed rate cuts to Taylor Swift's album success.
  • Kalshi raises trading limits to $7 million for certain contracts, aiming to attract hedge funds and large investors alongside its retail audience.
  • Despite regulatory challenges, including a court case against the CFTC, Kalshi positions itself as a pioneering exchange in event-based derivatives with Susquehanna's backing.

Event Contracts Attract Wall Street

Susquehanna International Group is launching a trading desk for event contracts on Kalshi Inc., aiming to draw Wall Street investors with interests ranging from Federal Reserve policy changes to pop culture phenomena like Taylor Swift's album success. Kalshi, having increased its trading limits, now allows for larger bets by hedge funds and institutional investors on binary options related to various outcomes, including Bitcoin's price and interest rate movements. David Pollard of Susquehanna expressed enthusiasm for participating in this emerging asset class, highlighting the opportunity for greater investor choice.

Political Influence and Market Dynamics

Jeffrey Yass, co-founder of Susquehanna and a significant political donor, is under the spotlight due to his substantial investment in TikTok's parent company, ByteDance, and his political contributions. With the U.S. elections approaching and discussions around TikTok's future in the U.S., Yass's potential influence on policy and market movements is notable. His involvement in political funding and connections with key figures could impact legislative outcomes, particularly concerning technology and social media platforms.

Retail Trading Evolution and Institutional Interest

The financial markets are witnessing a shift towards more sophisticated retail trading strategies, moving away from meme-stock mania to strategic bets on sectors like cryptocurrencies and artificial intelligence (AI). Institutional investors are also showing increased interest in cryptocurrencies, indicating a move towards a more balanced market driven by supply and demand dynamics. This evolution suggests a maturing of the retail trading landscape, with investors seeking strategic opportunities beyond traditional meme-driven movements.

Infrastructure Investment Amid Trading Surges

Coinbase Global Inc. plans to bolster its trading infrastructure following service outages during a significant surge in Bitcoin trading, attributed to heightened interest in Bitcoin ETFs. CEO Brian Armstrong announced the investment in response to the challenges faced during peak trading times, emphasizing the need for robust systems to support growing digital asset adoption. The move reflects the broader industry's focus on improving infrastructure to manage increased trading volumes and maintain market stability.

Management Quotes

  • David Pollard, Susquehanna International Group:

    "Kalshi is uniquely positioned to bring this next generation asset class to the next phase and we are thrilled to be an early player on this journey to provide greater choice and opportunity to investors."

  • Tarek Mansour, CEO of Kalshi:

    "With this launch, this type of commitment, it feels like we finally have broken the chicken-and-egg problem of the marketplace."