首批预测市场ETF暂缓上线，华尔街正盯着这门生意

Original: Odaily (@OdailyChina)

Author: Asher (@Asher_ 0210)

The first batch of prediction market ETFs did not launch in the U.S. market as originally planned.

Earlier this month, the first batch of ETF products related to prediction markets failed to take effect as scheduled due to further review by the U.S. SEC, forcing a delay in their listing. The SEC requires issuers to supplement details on product mechanisms and disclosures, particularly how these products track event contracts, handle settlement risks, and explain potential extreme losses to ordinary investors.

Just Before Launch, the SEC Hits Pause

Prediction market ETFs are not new products that suddenly appeared this month. In February this year, Roundhill Investments took the lead in submitting relevant filings, followed by Bitwise Asset Management and GraniteShares. The approach of several issuers is similar: packaging real-world event outcomes into ETF products, allowing investors to trade event probabilities through traditional securities accounts.

The first batch of products initially focused on U.S. political events, including which party (Democratic or Republican) would win the 2028 presidential election and control of the Senate and House of Representatives after the 2026 midterm elections. Subsequently, the scope of applications expanded to event-driven themes such as economic recession, tech industry layoffs, and commodity prices, with over 20 products pending review.

According to relevant rules, such ETFs can typically take effect automatically 75 days after filing, unless the SEC steps in for further review. Because multiple issuers submitted filings in February, early May became a critical time point for the first prediction market ETFs. Roundhill previously submitted updated documents, planning for its six prediction market ETFs focused on the U.S. presidential and congressional elections to take effect on May 5. The market initially expected Roundhill to become the first issuer to launch prediction market ETFs, with similar products from Bitwise and GraniteShares potentially following suit.

Ultimately, due to the SEC's intervention for further review, the first batch of products did not see automatic approval.

Delay "Not a Fatal Issue," But Enters a More Detailed Review Stage

Based on the SEC's current actions, prediction market ETFs seem to be required to provide additional explanations rather than facing outright rejection.

If regulators believed these products could not exist, the market would likely see a clearer negative signal. Instead, the SEC's current approach appears to require issuers to clarify several issues, including how the product gains exposure to event contracts, how the underlying prices are formed, how event outcomes are settled, the potential losses investors might bear, and whether the disclosure documents are straightforward enough.

Bloomberg ETF analyst Eric Balchunas posted on X that the SEC's decision to further review prediction market ETFs appears to be an effort by the regulator to conduct an additional check on the disclosure documents. Given the groundbreaking nature of these products, which would set an important regulatory precedent for prediction market ETFs if approved, it is understandable that the SEC is taking extra time to review them.

The SEC's cautious stance is because prediction market ETFs are fundamentally different from traditional ETFs. Ordinary industry ETFs buy a basket of stocks, thematic ETFs invest in a specific industry narrative, and Bitcoin ETFs track an asset's price. However, prediction market ETFs do not buy assets but rather the occurrence or non-occurrence of a specific event. Whether the Democrats win the 2028 presidential election, whether the Republicans control the Senate, whether the U.S. enters a recession, or whether the tech industry sees mass layoffs – these are not traditional assets but real-world events.

The uniqueness of prediction market ETFs lies in the fact that they look like ETFs, but their underlying assets are closer to binary event contracts. When ordinary investors see them in their brokerage accounts, they might mistake them for ordinary thematic funds. However, these products do not trade a basket of stocks or asset prices; they trade on whether a specific event ultimately occurs. A wrong prediction could lead to very direct losses, potentially near zero. The SEC's requirement for supplemental disclosures might be aimed at confirming whether issuers can clearly explain this structure and its associated risks.

The Launch Window Remains Open; Rules Are the Key

Although the launch of prediction market ETFs has been delayed, the market currently views this postponement more as a supplemental review rather than a regulatory shift towards rejection. Nate Geraci, President of The ETF Store, offered a relatively optimistic assessment. He noted that SEC Commissioner Hester Peirce recently mentioned in a speech that regulators are attempting to strike a balance between regulation and innovation. Nate Geraci believes this statement might be related to prediction market ETFs, suggesting such products could launch soon.

Currently, institutions might need to focus on whether the U.S. SEC is classifying this delay as a disclosure issue or a product attribute issue. However, regardless of which review path the SEC ultimately favors, the prediction market ETF trend is unlikely to disappear due to a single delay.

If the issue remains at the disclosure level, the first batch of products might just be delayed; if the regulator continues to scrutinize product attributes, the pace will slow down, but it will also force the industry to form clearer rules. For issuers, once disclosure standards, settlement requirements, and investor protection boundaries are gradually clarified, subsequent products will be easier to replicate.

More importantly, institutions have already begun designing products at different levels around prediction markets. One line directly tracks event outcomes like elections, recessions, and layoffs, while another line invests in prediction market platforms, trading infrastructure, market makers, and data service providers. Even if the review period for event-outcome ETFs lengthens, prediction markets as a financial theme have already been added to the product libraries of ETF issuers. In other words, Wall Street is not just waiting for a few election ETFs to be approved; it is betting ahead on the new business of "future events can also be traded."