Bitwise Asset Management has filed with the U.S. Securities and Exchange Commission to launch prediction-market-backed exchange-traded funds under a new brand, PredictionShares. The proposed funds would give retail investors access to political event contracts through standard brokerage accounts, rather than crypto prediction platforms.
How the PredictionShares ETFs Would Work
Bitwise plans to launch an initial lineup of six ETFs, each tracking a specific U.S. political outcome. Two funds focus on the outcome of the 2028 U.S. presidential election: one tied to a Democratic victory and another to a Republican win.
Four more funds would track which party controls the House and Senate after the 2026 midterm elections, splitting exposure between Democrats and Republicans for each chamber. Instead of holding stocks or bonds, each ETF would invest at least 80% of its assets in binary event contracts listed on CFTC-regulated exchanges.
These contracts typically settle at $1 if the event occurs and $0 if it does not, so the ETF’s value rises or falls with the perceived odds of the outcome. Bitwise says the price of each fund’s shares should roughly track the market’s implied probability for that political result.
Why Bitwise Is Entering Prediction Markets
Bitwise chief investment officer Matt Hougan says prediction markets have grown in size and relevance, especially around high-profile elections. He argues that many clients want regulated access to these markets but cannot or will not trade directly on platforms like Polymarket or Kalshi.
By wrapping event contracts in ETFs, Bitwise hopes to make this exposure available through familiar brokerage accounts and retirement platforms. The firm joins other issuers, including Roundhill Investments and GraniteShares, that have filed similar products as trading volumes in political contracts reach new highs.
The filing remains preliminary, and the SEC has not approved any PredictionShares funds. The prospectus warns that a fund tied to a single party could lose nearly all its value if that party loses the election.
Regulators also continue to debate where event contracts sit between derivatives, securities, and gambling products, especially when they involve political outcomes. The CFTC has previously tried to limit some election markets as “gaming,” while a U.S. court ruling in favor of Kalshi created room but not full clarity for political contracts.
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