NY plays hardball with prediction markets

Goldman Sachs is buying ETF manager Neos Investments for up to $2.25 billion, adding roughly $30 billion across 19 actively managed ETFs. Buried in the deal is a notable crypto product: BTCI, Neos’ roughly $1.1 billion Bitcoin High Income ETF, which owns bitcoin ETFs and sells options to generate hefty monthly distributions while retaining some BTC upside. ETF analyst Eric Balchunas notes Goldman had previously filed for its own bitcoin covered-call product but never launched it. Now, instead of building one from scratch, it’s acquiring an established version along with the rest of Neos. Read more →

Yesterday, the CFTC invoked emergency authority to keep Kalshi operating nationwide, after an escalatory jurisdictional fight with New York over who gets to regulate prediction markets. Then, today, New York City Council announced it is investigating four prediction markets (Polymarket, Kalshi, Coinbase, and Gemini Titan) for alleged deceptive marketing practices and targeting minors.

Crypto market maker Wintermute plans to spend about $1 billion over the next five years on AI and high-frequency trading infrastructure as it pushes deeper into stocks, commodities and foreign exchange. Crypto still drives roughly 90% of revenue today, but CEO Evgeny Gaevoy wants traditional markets to account for more than half by the end of 2027. The ambition is basically to turn a crypto-native trading shop into something closer to Jane Street or Citadel Securities – an internal strategy the company has coined “TradFi or die.” Read more →

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