Wintermute has entered prediction markets as a liquidity provider, aiming to improve execution depth and bid-ask spreads. Prediction markets have seen significant growth, with Kalshi valued at $22 billion. Wintermute’s participation could lead to tighter spreads, making it easier to execute larger trades and reducing pricing gaps that professional firms see as tradable opportunities. Regulators are increasing scrutiny on the sector due to manipulation risks and potential tax revenue losses.

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