Wall Street is launching the first ever prediction market ETFs for U.S. elections

Roundhill Investments is set to launch the first U.S. exchange-traded funds (ETFs) linked to prediction markets for U.S. elections. These ETFs, which will be SEC-regulated, use swap agreements referencing binary event contracts traded on CFTC-regulated markets. The initial launch includes six funds: the Roundhill Democratic President ETF (BLUP), Republican President ETF (REDP), Democratic Senate ETF (BLUS), Republican Senate ETF (REDS), Democratic House ETF (BLUH), and Republican House ETF (REDH). The House and Senate funds will track outcomes of the November 3, 2026 elections, while the presidential funds will focus on the November 7, 2028 race. If the targeted party does not win, the fund will lose substantially all of its value. The funds are designed to roll into subsequent election cycles if the market prices an outcome with high certainty. This move aims to expand access to election trading through retail brokerage accounts. Other asset managers like Bitwise and GraniteShares are also preparing similar products, though with slight structural differences regarding fund termination after outcomes are determined. This development follows the CFTC's withdrawal of a proposal that would have banned political event contracts, although some state regulators continue to challenge these contracts.

(Source：CoinDesk)