Digital asset manager Bitwise has filed for a prediction market ETF, joining Roundhill Investments in a race to offer exchange-traded funds tied to political event contracts. The filings target election outcomes for 2026 and 2028 as the segment sees record growth and a regulatory clash between the CFTC and state authorities.
Cryptocurrency-based prediction markets are emerging as a potential breakout sector following stablecoins, with major financial players now positioning for its growth. Bitwise filed for a prediction market ETF under the ‘PredictionShares’ brand, focusing on contracts for the 2026 and 2028 U.S. elections. This follows Roundhill Investments’ similar move, and Bloomberg ETF analyst James Seyffart stated more filings are expected.
The filings align with Bitwise’s 2026 outlook, which projected prediction platform Polymarket would hit record open interest ahead of the midterms. Seyffart noted, “The financialization and ETF-ization of everything continues.” Trading firm Susquehanna (SIG) is also reportedly positioning for the sector’s expansion.
Prediction markets are event contracts allowing users to speculate on future outcomes. Supporters argue these provide robust data for hedging, better than traditional surveys, and are rallying behind CFTC chair Mike Selig to defend federal oversight. State authorities, however, largely view them as gambling and call for stricter local regulation.
The sector’s growth is significant, reaching a new all-time monthly volume of $12.4 billion in January 2026 according to Dune data. This marks the first time monthly volume has surpassed $10 billion, fueled largely by political events. The jurisdictional battle between federal and state regulators remains a key uncertainty for the market’s future.
