Bitwise Investments and GraniteShares are both filing their respective prospectuses to the SEC for a new series of ETF's based on the outcome of U.S. elections. This marks the beginning of a fresh institutional interest in creating regulated investment products that are linked to market events involving politics. <h2>What the Prospectuses Say</h2>On Tuesday, both Bitwise and GraniteShares applied to list a new line of prediction market style ETFs on NYSE Arca using the ‘PredictionShares’ branding, all of which focus on U.S. elections. The six proposed prediction market ETFs will include: <ol><li data-list="bullet">Two ETFs that track who will win the 2028 presidential election (Democrat or Republican)&nbsp;</li></ol> <ol><li data-list="bullet">Two ETFs that track which party will control the Senate after the 2026 midterm elections&nbsp;</li></ol> <ol><li data-list="bullet">Two ETFs that track which party will control the House of Representatives after the 2026 elections&nbsp;</li></ol> <ol><li data-list="bullet">The prediction market ETFs will invest 80 percent or more of their assets in “binary outcome event contracts” that will be traded on the CFTC regulated markets. If the outcome occurs, the binary outcome event contract will settle for $1, if not, it will settle for $0.</li></ol> <img src="https://jid.rerrkvifj.com/media/customer/creatorSystem/93efe960-52d3-4903-a8d6-60d240b97ebc.jpeg"> <h2>How These ETF Structures Work</h2>Newly created exchange traded funds (ETFs) are intended to transform political market contracts (historically traded directly) into typically accessible vehicles via consumer brokerages. Thus, rather than buying into stocks or bonds, investors would have access to predicting the probabilities associated with potential political outcomes.&nbsp;If an ETF holds contracts for a predicted event (for example, a Democratic presidential win), upon settlement of the contracts, the ETF would deliver to investors a capital gain based upon the $1 per contract price at settlement. Conversely, should an event not occur, the ETF is subject to losing almost all of its value. This structure has a higher degree of inherent risk than traditional ETF products. <h2>Not Just a Bitwise Play — GraniteShares Too</h2>GraniteShares is filing an ETF product similar to Bitwise, which may indicate that this segment of the ETF industry is drawing the attention of competitors. Both companies would create ETFs that would allow investors to track the changing control of parties over time. Both sets of filings show similar characteristics and risks associated with their products; however, there are some minor differences with respect to each company’s plans for whether the new ETFs will terminate after the election cycle or move forward into the subsequent election. <h2>Broader Context in Prediction Market Innovation</h2>The entry of other issuers into this area (including Roundhill Investments, which has also recently applied for political outcome ETFs) is reflective of the overall trend toward financialization and ETF -ization of prediction markets, according to ETF analysts who see this development as potentially opening a “huge door” for event-driven securities if approved by regulators. <h2>What This Means for Investors</h2>These products will be a new type of ETF which directly link portfolio returns to binary political outcomes, and thus represent an innovative and highly risky investment tool for those wishing to hedge against or speculate on likely election outcomes. Regulatory approval is not guaranteed as there are currently no ETFs that the SEC has authorised with regard to political outcomes. Bitwise and GraniteShares have applied to the SEC for approval of ETF products linked to election outcomes. If granted, regulatory trading in ETF format would be a significant breakthrough toward allowing investors access to voting outcome-based investment markets. While waiting for SEC approval, it is critically important for investors to stay abreast of SEC activity and monitor the regulatory developments of this emerging niche market.

Bitwise & GraniteShares file SEC prospectuses for PredictionShares ETFs tracking 2028 presidential and 2026 Senate/House party wins via binary event contracts.

Bitwise and GraniteShares File for U.S. Election Prediction ETFs

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