Bitwise, GraniteShares Launch US Election Prediction ETFs
Bitwise and GraniteShares Enter the Competition for Prediction Market ETFs
Prominent exchange-traded fund providers Bitwise and GraniteShares have recently submitted filings to the United States Securities and Exchange Commission, aiming to introduce innovative funds directly linked to the results of upcoming US elections through event contracts.
These filings mark a significant development in the financial markets, where investors can now potentially position themselves to benefit from specific political outcomes via structured investment products traded on major exchanges.
Bitwise Unveils PredictionShares ETF Suite
On Tuesday, Bitwise submitted a comprehensive prospectus outlining its new PredictionShares brand, which includes a total of six distinct exchange-traded funds designed in the style of prediction markets and intended for listing on the NYSE Arca exchange.
The initial pair of these funds focuses on the 2028 US presidential election, with one fund set to deliver payouts should a Democratic candidate emerge victorious, and the other providing returns if a Republican candidate secures the win on November 7, 2028.
Following these, two additional funds target the Senate elections scheduled for November 2026, offering payouts based on whether Democrats or Republicans gain control of that legislative body.
Completing the lineup are the final two funds, which are tied to the House of Representatives elections, again providing binary outcomes for Democratic or Republican majorities.
According to the prospectus, each of these funds has a clear investment objective: for instance, the Democratic presidential fund seeks to deliver capital appreciation precisely when a Democratic Party member claims victory in the 2028 presidential race.
To achieve this, every fund commits to investing a minimum of 80% of its net assets into binary event contracts. These are specialized political prediction market derivatives that trade on exchanges regulated by the Commodity Futures Trading Commission.
The mechanics of these contracts are straightforward: they settle at a value of $1 if the specified event transpires as predicted, or drop to $0 if the outcome does not occur.
The prospectus candidly highlights the high-risk nature of these investments, noting that if the anticipated event fails to materialize—for example, if no Democrat wins the 2028 presidency—the corresponding fund would essentially lose nearly all of its value.
Investing in Election Outcomes Through ETF Wrappers
At its core, Bitwise’s approach provides investors with dedicated ETFs for each specific electoral contest and for each political party involved, enabling targeted bets on preferred outcomes without needing direct access to prediction markets.
The daily share price of these ETFs dynamically mirrors the market’s collective assessment of the likelihood of the event occurring, oscillating between $0 and $1 in response to evolving factors such as opinion polls, breaking news developments, and shifts in public sentiment.
This structure allows for a seamless, regulated way for retail and institutional investors alike to engage with political event probabilities through familiar ETF vehicles.
GraniteShares Follows Suit with Identical Offerings
In a parallel move, ETF issuer GraniteShares also lodged its prospectus with the SEC on the same Tuesday, proposing an identical set of six funds structured around the same key US election outcomes: the presidency, Senate, and House.
This convergence of filings underscores a burgeoning trend where traditional financial products increasingly incorporate elements of prediction markets to offer novel exposure to real-world events.
Bloomberg ETF analyst James Seyffart captured the moment succinctly, observing that the ongoing financialization and transformation of diverse assets into ETF formats shows no signs of slowing down.
Not the Pioneers, but Part of a Growing Wave
Seyffart further contextualized these submissions by pointing out that they are far from the inaugural attempts in this space. He expressed confidence that additional similar filings from other issuers are probable in the near future.
Specifically, he referenced the earlier prospectus from Roundhill Investments, dated February 14, which similarly proposed six prediction market-style ETFs centered on the presidential race, Senate control, and House majority outcomes.
This pattern suggests that competition is heating up among ETF providers to capture investor interest in politically driven financial instruments, potentially reshaping how markets price and trade on democratic processes.
As regulatory scrutiny continues and market demand evolves, these products could pave the way for broader acceptance of event-based investing within mainstream portfolios, blending politics with traditional asset management strategies.
