More than two dozen exchange-traded funds (ETFs) linked to real-world events such as elections, recessions and technology sector layoffs are awaiting U.S. regulatory clearance, as issuers attempt to translate rising interest in prediction markets into exchange-traded products accessible to retail investors.
Roundhill Investments, GraniteShares and Bitwise filed in February with the Securities and Exchange Commission (SEC) to launch ETFs designed to capitalize on booming prediction-market activity. The products had been expected to begin trading this week, but their launches have been delayed as the SEC requests additional information from issuers on product mechanics and disclosures, according to two people familiar with the matter.
The people, who requested anonymity to discuss private regulatory matters, indicated that the delay is likely temporary. Under existing SEC rules, ETFs generally become automatically effective 75 days after filing unless the SEC intervenes. That 75-day period was due to expire this week, prompting expectations of imminent launches before the regulator stepped in.
A spokesperson for the SEC declined to comment on the status of the filings. Roundhill CEO Dave Mazza and a spokeswoman for GraniteShares also declined to comment.
Event-Driven ETF Proposals
Together, Roundhill Investments, GraniteShares and Bitwise have applied to list more than two dozen ETFs tied to prediction markets. The first wave of funds is focused on this year's Senate and House midterm races and the 2028 U.S. presidential election. Other proposed ETFs reference outcomes such as the scale of layoffs in the technology industry and whether the United States will enter a recession this year.
Bitwise filed on Friday for an additional ETF that would enable investors to take positions on whether the price of crude oil will exceed $120 per barrel this year.
Structure and Risk Disclosures
The proposed ETFs generally intend to use derivatives to track the odds of binary yes-or-no outcomes in underlying event contracts traded on exchanges regulated by the Commodity Futures Trading Commission (CFTC), including platforms such as Kalshi. These structures seek to mirror the probabilities implied by prediction markets within an ETF wrapper.
Regulatory filings for the products contain extensive risk disclosures. They highlight the potential impact of new regulations, possible litigation and what Roundhill describes as heightened risks related to insider trading in event contracts. The documents also warn that investors could face catastrophic losses, underscoring the speculative nature of the strategies being proposed.
