TLDR
- Bitwise has filed a prospectus with the SEC to launch ETFs that invest in event contracts tied to the 2028 U.S. presidential election.
- The proposed ETFs will hold event contracts whose value fluctuates based on political outcomes, allowing investors to bet on election results.
- Other asset managers, including GraniteShares and Roundhill, have also filed similar proposals, testing market interest in political event-based ETFs.
- ETF analyst James Seyffart notes the growing trend of financializing prediction markets through ETFs.
- Roundhill’s political market ETFs could become a game-changer if approved, potentially opening doors for more event-driven financial products.
Bitwise has filed a prospectus with the U.S. Securities and Exchange Commission (SEC) proposing exchange-traded funds (ETFs) that invest in event contracts tied to the 2028 U.S. presidential election. The filing, under the brand “PredictionShares,” aims to offer ETFs that hold event contracts whose values fluctuate depending on political outcomes. This effort follows a trend of asset managers exploring financial products tied to political and event-driven markets.
PredictionShares Plans ETFs with Event Contracts
Bitwise’s proposed ETFs will hold event contracts, which rise or fall in value based on election outcomes. These contracts are typically traded on regulated prediction markets, where participants buy and sell shares reflecting the probability of specific real-world events. The ETF structure would allow investors to bet on political events while maintaining the familiar format of a traditional ETF.
The PredictionShares filing aims to expand the market by bringing prediction market contracts to a larger investor base. The proposed ETFs would function similarly to other event-driven funds but would focus specifically on the 2028 U.S. presidential election. Bitwise’s filing marks a new step in financializing prediction markets, combining them with the accessibility and regulation of ETFs.
Bitwise Joins Other Asset Managers in Testing Market Interest
Other asset managers have also filed similar proposals, including GraniteShares and Roundhill, according to SEC documents. These firms are testing whether investors are interested in ETFs built around political events and other prediction markets. The filings suggest a growing interest in using traditional financial products to trade political outcomes and other event-driven markets.
James Seyffart, an ETF analyst at Bloomberg, highlighted the growing trend of “financialization and ETF-ization of everything.” He noted that this development is part of a broader movement to create more specialized financial products. Seyffart added that this is likely not the last ETF of its kind, as more proposals could follow.
Roundhill’s similar ETF proposals have been viewed as potentially groundbreaking if approved. According to Eric Balchunas, an ETF analyst at Bloomberg, these ETFs could pave the way for a broader range of event-linked financial products. Balchunas suggested that political event contracts might become a more mainstream product if regulatory hurdles are cleared.
While the concept of prediction market-based ETFs is still new, its potential to change how people invest in political outcomes is clear. Investors could use these funds to hedge against changes in political landscapes, such as the 2028 election.