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The latest developments in prediction markets products could mean more institutional investors get on board.
ETF issuers Roundhill Investments, Bitwise Asset Management, and GraniteShares have filed with the Securities and Exchange Commission to launch funds that, if approved, would hold event contracts tied to the outcome of this year’s U.S. congressional elections and the 2028 presidential election.
The proposed exchange-traded funds would use event contracts—derivatives found on prediction market platforms such as Kalshi and Polymarket—that typically have binary outcomes. In the filings, the ETFs are structured around whether the elections swing in favor of the Democratic or Republican parties.
The filings suggest a broader effort by the prediction markets industry to offer products that are suitable for institutional investors as well as individual investors. If the SEC approves the ETFs, they could provide another route for everyday investors to access prediction markets while also “institutionalizing” the market through fund wrappers similar to how cryptocurrency products were introduced.
Bitwise Chief Investment Officer Matt Hougan said the path for prediction markets appears similar to crypto’s earlier journey toward legitimacy, describing the ETFs as a potential “crowning achievement” in that process.
Whether the SEC will approve the ETFs—and how long the review process will take—remains unclear. The filings are also light on certain operational details, including which exchanges the funds would use and the fees they would charge, which is common at early stages of the approval process.
The filings include provisions describing settlement mechanics and risks specific to event contracts.
In the event that election outcomes are counter to an ETF’s strategy—for example, if the Democratic Party wins control of the U.S. Senate after the Nov. 3 elections—an ETF betting on the Republican Party would “substantially lose all of its value,” according to the filings.
Roundhill and GraniteShares include a provision stating that if, prior to the formal settlement of contracts, the price of contracts indicates an all-but-certain victory for five consecutive trading days, the fund will assess that the outcome has been decided early.
Roundhill’s filing also describes “settlement risk” in event contracts. For example, if the outcome of the 2028 presidential election is later found to be incorrect after the fund exits its positions, there would be no recourse.
After event contracts are settled, Roundhill and GraniteShares expect to roll the funds into new contracts tied to the next set of elections. Bitwise’s PredictionShares ETFs would terminate the funds soon after the outcomes of the event contracts are determined, effectively mirroring how prediction market contracts work.
Beyond the ETF filings, prediction markets activity has been expanding, with companies developing products aimed at broader audiences and institutional access. CME Group partnered with FanDuel to launch a prediction markets app that allows users to trade sports event contracts as well as economic indicators and oil and gas prices. Cboe Global Markets has been reported to be in talks with retail brokerages to bring back yes-or-no options that would compete with event contracts.
Tradeweb Markets also partnered with Kalshi and plans to put prediction markets data in front of its users, including some institutional investors.
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