The World's First 'Prediction Market ETF' is Coming

Wall Street wants to let you bet on elections from your brokerage account.

Three asset managers have now filed with the U.S. Securities and Exchange Commission (SEC) to launch prediction market exchange-traded funds (ETFs), a product category that didn't exist a week ago. If approved, these funds would give everyday investors a way to wager on U.S. election outcomes without ever touching a crypto platform like Polymarket or Kalshi.

It sounds wild because it kind of is.

What Exactly Did Bitwise File For?

On February 17, 2026, Bitwise Asset Management submitted a prospectus for six ETFs under a new brand called "PredictionShares." The proposed funds would list on NYSE Arca and cover two major U.S. election cycles.

Two funds track the 2028 presidential election, one for a Democratic win and one for a Republican win. Two more target control of the U.S. Senate after the 2026 midterms, again split by party. The final two do the same for the House of Representatives.

Each fund would invest at least 80% of its net assets in binary event contracts traded on Commodity Futures Trading Commission (CFTC) regulated exchanges. These contracts settle at $1 if the predicted outcome happens and $0 if it doesn't. So the share price effectively reflects the market's real-time probability estimate for that specific result.

Here's the catch: if your party loses, the fund loses substantially all of its value. This isn't a diversified index play. It's a directional bet wrapped in an ETF.

Who Else is in the Race?

Bitwise isn't filing in a vacuum. Roundhill Investments got there first, submitting a comparable six-fund lineup on February 13. GraniteShares followed Bitwise the same day, offering its own set of six nearly identical products.

That's three issuers, 18 proposed funds, and a clear signal that the industry sees serious money here.

Bitwise CIO Matt Hougan said prediction markets are growing in both scale and importance, and that client demand pushed the firm to act. Bloomberg Intelligence analyst James Seyffart put it more bluntly, calling the filings part of a broader pattern he described as the ongoing financialization and ETF-ization of everything. He added that more filings are likely on the way.

Why Now?

Prediction market volumes have been surging. The sector recorded $15.4 billion in volume in January 2026 alone, fueled by political polarization and a growing appetite for event-driven speculation. Platforms like Polymarket saw record trading activity during the 2024 U.S. election cycle, and that momentum hasn't slowed.

Ganesh Mahidhar, an investment professional at Further Ventures, told Decrypt that hedge funds and quant firms are drawn to the liquidity these markets offer. He described bringing regulated access to a broader retail audience as a natural next step for the event contract space.

The timing also lines up with broader market dynamics. With spot Bitcoin ETFs delivering relatively muted returns in recent weeks and crypto fund outflows stacking up, issuers are hunting for fresh themes to attract investor capital. Election betting fits the bill.

What Are the Risks?

The regulatory picture is far from settled. The SEC hasn't approved any of these filings yet, and the CFTC is still working out where political event contracts sit in the regulatory framework. The agency has previously tried to limit some election markets by classifying them as gaming products, though a U.S. court ruling in favor of Kalshi opened some doors.

There are also manipulation concerns. Kadan Stadelmann, CTO at Komodo Platform, warned that political prediction markets could give insiders a way to trade on classified information and potentially open elections to outside influence.

State regulators are pushing back as well. Coinbase's prediction markets product recently drew fire from Nevada regulators over alleged unlicensed sports betting, while Polymarket has been fighting state-level challenges in Massachusetts. The CFTC has since filed a court brief asserting exclusive federal authority over prediction markets, adding another layer to an already messy jurisdictional tug-of-war.

What Happens Next?

All three filings are preliminary. The SEC has a standard review window and could issue comments, request changes, or reject the proposals entirely. If things go smoothly, the earliest launches could potentially arrive ahead of the 2026 midterms, which would create a live test case for how these products perform during an actual election cycle.

For crypto-native users, the concept is already familiar. Polymarket and Kalshi have been doing this. The difference here is distribution. Wrapping election bets in an ETF means they could show up in retirement accounts, robo-advisors, and standard brokerage platforms, putting prediction markets in front of a much larger audience.

Whether regulators are ready for that is another question entirely.

Sources:

• Decrypt - Detailed reporting on Bitwise, Roundhill, and GraniteShares ETF filings with expert commentary from Ganesh Mahidhar and Kadan Stadelmann
• Crypto.news - Coverage of Bitwise PredictionShares filing details and fund structure
• Cointelegraph - Reporting on all three issuers' filings with James Seyffart commentary
• BeInCrypto - Institutional interest analysis and $15.4 billion volume data
• The Block - Regulatory context including state-level enforcement actions and CFTC jurisdictional claims
• Casino.org - Additional detail on GraniteShares fund structure and post-election reconfiguration plans