Major ETF issuers Bitwise Asset Management, Roundhill Investments, and GraniteShares have filed to launch prediction market ETFs tied to U.S. elections. Experts predict strong demand from hedge funds but warn of insider trading and manipulation risks. The filings coincide with the approaching U.S. midterms and a regulatory push by the Commodity Futures Trading Commission to assert federal authority over these markets.
Wall Street’s latest push into political prediction markets is drawing both strong liquidity expectations and warnings of manipulation from industry experts. Major ETF issuers are racing to launch election-linked funds ahead of the U.S. midterms.
Fund managers Bitwise Asset Management, Roundhill Investments, and GraniteShares are seeking to launch prediction-market ETFs, with Bitwise products offering exposure to contracts tied to the 2028 presidential race and the 2026 congressional midterms. Ganesh Mahidhar, Investment Professional at Further Ventures, stated that “Given the level of interest in these event markets, providing liquidity would be very attractive for various hedge funds and quant trading firms.”
Conversely, Kadan Stadelmann, CTO at Komodo Platform, warned that “political prediction markets create opportunities for insiders to trade on classified information and can also open the elections up to manipulation.” He suggested issuers are searching for new themes as crypto funds see outflows and spot Bitcoin ETFs deliver muted momentum.
Regulators in several states have moved against contracts on platforms like Kalshi and Polymarket, calling them unlicensed gambling. The Commodity Futures Trading Commission Chairman Michael Selig announced the agency filed an amicus brief asserting federal authority over these markets. In a subsequent op-ed, Selig wrote the CFTC views event contracts as swaps under its rules rather than gambling.
