New Prediction Market ETFs Aim to Revolutionize U.S. Election Investment

By: Eliza Bennet

In a significant move signaling Wall Street's growing interest in prediction markets, both Bitwise and GraniteShares have filed proposals with the U.S. Securities and Exchange Commission (SEC) to introduce a novel type of exchange-traded funds (ETFs). These ETFs are designed to allow public investors to capitalize on the outcomes of upcoming U.S. elections, thereby embedding prediction markets more firmly into the investment landscape. The emergence of prediction market-style ETFs represents a groundbreaking avenue for investors looking to engage with political events.

The ETFs proposed by Bitwise, under the brand name PredictionShares, are crafted to pay out based on the results of forthcoming U.S. elections. Initial filings reveal plans for six ETFs, with each tied to different political contests. The first set targets the U.S. presidential election in November 2028, offering payouts depending on whether a Democrat or a Republican secures the presidency. Following the presidential election, subsequent funds are aligned with Congressional races in 2026, focusing on which party controls the Senate or the House of Representatives.

This strategic initiative by Bitwise and GraniteShares reflects an increasing institutional appetite to explore avenues beyond traditional investment products. These ETFs align with the broader trend of financializing diverse types of predictive data. While pioneering in their direct approach to political outcomes, they signal a potential expansion of prediction markets into standard investment portfolios. This development is likely to attract a wide array of investors, from politically savvy amateurs to seasoned institutional entities interested in diversifying their strategies.

As the U.S. election cycle garners more attention, these ETFs offer a structured and potentially profitable way to engage with the political environment. Their introduction not only encourages a deeper understanding of political risk assessment in financial markets but also highlights the versatility of ETFs in adapting to new forms of speculative investment. With this innovation, investors can look forward to leveraging political events more strategically, marking yet another milestone in the evolving landscape of financial products.