Wall Street Files Election ETFs As Betting Volume Hits $15.4B

Three asset managers filed for election-tied prediction market ETFs on the same week, as monthly trading volume in the sector hit a record $15.4 billion in January, signaling a new frontier for institutional product development on Wall Street.

What Happened: Election-Contract ETF Filings

Bitwise Asset Management submitted a post-effective amendment on Feb. 17, 2026, to register six exchange-traded funds under a new brand called "PredictionShares," with the proposed products tied to U.S. election outcomes and set to be listed on NYSE Arca.

The six funds cover both major parties across three races: the 2028 presidential election and the 2026 Senate and House elections. Each ETF would invest at least 80% of its net assets in derivative instruments linked to a specific political outcome, gaining exposure primarily through swap agreements that reference CFTC-regulated event contracts.

The contracts follow a binary payout structure, settling at $1 if the specified outcome occurs and $0 if it does not. "This makes an investment in the Fund highly risky," the filing states, warning that the products are not suitable for investors who do not fully understand the strategy.

GraniteShares filed for six similar funds on the same day. Both filings followed a comparable move by Roundhill Investments days earlier, on Feb. 13.

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Why It Matters: Wall Street's New Bet

Bloomberg Intelligence Senior Research Analyst James Seyffart suggested more filings are on the way. "The financialization and ETF-ization of everything continues," he said.

The filings arrive as prediction markets post record growth. Data from Dune Analytics shows monthly trading volume reached $15.4 billion in January, an all-time high, while transaction count surpassed 122 million and monthly users rose to 830,520.

The rush mirrors the wave of ETF applications tied to digital assets like Bitcoin (BTC) and Ethereum (ETH), when asset managers moved to capitalize on renewed momentum following the election of a pro-crypto administration. With demand for spot crypto ETFs showing signs of slowing, institutions appear to be broadening their focus toward prediction markets as the next area of product expansion.

Bitwise CIO Matt Hougan said prediction markets are growing in both scale and importance, calling client exposure an opportunity the firm could not pass up.