Bitwise Targets 2026 and 2028 U.S. Election Outcomes With Binary ETFs

Bitwise Asset Management has filed with the SEC for six ETFs that will track outcomes of the 2026 midterms and 2028 U.S. presidential election. Each fund will invest in binary event contracts linked to specific election results, offering a regulated approach to political betting.

The new ETFs, branded as PredictionShares, will settle at $1 if the predicted outcome occurs and $0 if it does not. This structure is similar to how crypto ETFs allow indirect exposure without direct ownership of the underlying asset.

The filing marks a growing interest in prediction market products. Roundhill, GraniteShares, and other firms have also submitted similar proposals, signaling broader adoption of this investment vehicle.

Why Did This Happen?

The SEC's recent regulatory developments have enabled the growth of prediction markets. The Commodity Futures Trading Commission (CFTC) has allowed event contracts on platforms like Kalshi and Polymarket, providing a legal framework for binary trading.

Bitwise CIO Matt Hougan has stated that prediction markets are becoming a significant part of global financial systems. He compared the approval of these ETFs to the growth of crypto ETFs, calling it a potential milestone in financial innovation.

How Do These ETFs Work?

Each ETF will invest at least 80% of its assets in binary event contracts traded on CFTC-regulated platforms. Investors receive $1 per contract if the predicted outcome materializes, or $0 if it does not.

The funds will be structured as part of the Bitwise Funds Trust and listed on NYSE Arca. For example, a fund tied to a Democratic presidential win in 2028 will pay out $1 per contract if that candidate wins the election.

Unlike traditional ETFs, these funds will rely heavily on derivative instruments tied to a single binary event. This structure introduces high risk, as investors could lose nearly all value if the predicted outcome does not occur.

What Are Analysts Watching Next?

Analysts are closely monitoring the SEC's response to these filings. The approval process will determine whether prediction markets become a mainstream investment category. If accepted, these ETFs could expand the $14 trillion ETF ecosystem into new territory.

State regulators in Nevada, New Jersey, and Massachusetts have raised legal challenges to the legitimacy of event contracts under state gaming laws. This adds uncertainty to the regulatory environment for these products.

Additionally, the passage of the Genius Act and Clarity Act in Q2 2026 could further shape the regulatory landscape for crypto and prediction markets. These laws aim to provide clarity and foster institutional adoption by improving oversight and enabling new financial products.

Investors are also watching for how these ETFs perform compared to existing crypto ETFs, which have entered a more mature phase in 2026. Slower inflows and increased institutional influence suggest a shift in market dynamics.