Institutional traders are getting into prediction markets, following a method seen earlier within the crypto area.
Asset managers are submitting for prediction-market tied exchange-traded funds because the area continues to achieve traction.
Sponsored
Sponsored
Institutional Capital Strikes Into Prediction Markets as ETF Race Begins
On February 17, 2026, Bitwise Asset Administration submitted a post-effective modification to register six ETFs below a brand new model referred to as “PredictionShares.” The proposed funds, tied to occasion contracts on the end result of US elections, could be listed and primarily traded on NYSE Arca.
“PredictionShares will serve as a new Bitwise platform focused on providing exposure to prediction markets. Bitwise’s CIO Matt Hougan says prediction markets are accelerating in both scale and importance, making client exposure an opportunity the firm couldn’t pass up,” Crypto In America host Eleanor Terrett wrote.
The six proposed funds are:
- PredictionShares Democratic President Wins 2028 Election
- PredictionShares Republican President Wins 2028 Election
- PredictionShares Democrats Win Senate 2026 Election
- PredictionShares Republicans Win Senate 2026 Election
- PredictionShares Democrats Win Home 2026 Election
- PredictionShares Republicans Win Home 2026 Election
Every ETF seeks capital appreciation tied to a particular US election consequence. It follows an 80% funding coverage below which it’ll make investments not less than 80% of its internet belongings, plus any borrowings for funding functions, in by-product devices whose worth is linked to that outlined political occasion.
The funds achieve publicity primarily by swap agreements that reference CFTC-regulated occasion contracts listed on designated contract markets, though they might additionally make investments immediately in these occasion contracts. The occasion contracts observe a binary payout construction, usually settling at $1 if the required consequence happens and at $0 if it doesn’t.
“This makes an investment in the Fund highly risky. An investment in the Fund is not appropriate for investors who do not wish to invest in a highly risky investment product or who do not fully understand the Fund’s investment strategy. Such investors are urged not to purchase Fund Shares,” the submitting reads.
Sponsored
Sponsored
Furthermore, GraniteShares, an unbiased ETF issuer, additionally filed a Type 485APOS on February 17 for six related funds. These two filings adopted shortly after Roundhill made the identical transfer.
Bloomberg Intelligence Senior Analysis Analyst James Seyffart indicated that extra filings are prone to proceed.
“The financialization and ETF-ization of everything continues,” he added.
The ETF filings arrive because the prediction market sector posts record-breaking development. The transfer mirrors the surge of ETF purposes tied to digital belongings, when asset managers rushed to capitalize on renewed momentum within the sector following the election of a pro-crypto administration.
Whereas demand for Bitcoin and Ethereum ETFs seems to have slowed, evidenced by important outflows from the spot merchandise, establishments could also be trying to broaden their publicity to the rising prediction market area.
Knowledge from Dune Analytics highlights the sector’s momentum. Month-to-month buying and selling quantity climbed to $15.4 billion in January, setting a brand new all-time excessive.
Prediction Market Month-to-month Quantity. Supply: Dune
Transaction rely additionally reached a report, surpassing 122 million, whereas month-to-month customers rose to 830,520. Taken collectively, these counsel sustained development throughout the prediction market sector, alongside growing product improvement and institutional curiosity.
