Bitwise targets political prediction markets with new ETF filing

Bitwise Asset Management has filed regulatory documents to introduce exchange-traded funds linked to political prediction markets.

The filing, dated Feb. 17, outlines plans for ETFs under a new PredictionShares brand that would allow investors to access political outcome contracts through brokerage accounts.

Bloomberg ETF analyst James Seyffart disclosed the development on social media, noting the proposal remains incomplete and subject to approval.

The securities cannot be offered or sold until the US Securities and Exchange Commission approves the registration statement.

Election outcome contracts form ETF core

The first two products would pay out depending on whether a Democrat or a Republican wins the US presidential election scheduled for November 7, 2028.

Two additional funds are linked to which party controls the Senate in November 2026, while the final two depend on which party wins the House.

“The fund’s investment objective is to provide capital appreciation to investors in the event that a member of the Democratic Party is the winner of the US Presidential election taking place on November 7, 2028,” the prospectus stated.

Each fund will invest at least 80% of its net assets in binary event contracts traded on Commodity Futures Trading Commission-regulated exchanges.

These contracts settle at $1 if the referenced outcome occurs and $0 if it does not.

“In the event that a member of the Democratic Party is not the winner of the 2028 Presidential election, the fund will lose substantially all of its value,” it explained.

GraniteShares has filed for six similar funds structured around the same election outcomes.

Rising competition and regulatory scrutiny

The filings add to a broader trend of integrating prediction markets into mainstream finance.

Seyffart commented, “The financialization and ETF-ization of everything continues.”

He also noted, “This is not the first filing of this kind, and I think it’s extremely unlikely that these will be the last,” referencing similar filings by Roundhill Investments.

Fund managers Bitwise, Roundhill, and GraniteShares are seeking exposure to contracts tied to the 2028 presidential election and the 2026 congressional midterms.

Bitwise chief investment officer Matt Hougan said prediction markets have grown in size and relevance, attracting attention from investors and asset managers.

He added that client demand influenced the firm’s decision to pursue these products.

Platforms such as Polymarket have recorded significant trading activity during major political events, contributing to broader awareness.

These platforms allow users to trade contracts tied to political and economic outcomes.

Prediction market products face criticism and regulatory examination.

Vitalik Buterin and other observers have warned that such contracts can behave like speculative bets and carry substantial risk.

At the same time, regulators are increasing oversight.

Authorities in Nevada, Massachusetts, and other states have challenged prediction-market operators, arguing that election-linked contracts resemble unlicensed gambling.

Legal disputes are ongoing over whether such markets fall under state jurisdiction or federal oversight.