Wall Street Pushes Deeper Into Prediction Markets With New ETF Filings
Major ETF issuers including Bitwise, Roundhill, and GraniteShares are planning to launch political prediction-market ETFs linked to the 2028 U.S. presidential election and 2026 congressional midterms, aiming to capitalize on heightened demand for trading contracts tied to election outcomes. Products will let investors speculate on which party wins the presidency or controls Congress. Industry experts anticipate strong liquidity from hedge funds and quant traders, citing high volatility and tight spreads, but warn of increased risks of insider trading and potential market manipulation. Regulatory scrutiny is intensifying, as state authorities have taken legal action against platforms such as Polymarket and Kalshi for unlicensed gambling, while the Commodity Futures Trading Commission (CFTC) asserts federal authority over these markets, classifying event contracts as swaps rather than gambling instruments. This evolving regulatory fight highlights tensions between state and federal oversight as interest and financial products tied to political events grow on Wall Street.
