Bitwise bets on 2028: how ETFs are transforming prediction markets

The political prediction market is undergoing transformation. Bitwise Asset Management, a San Francisco-based crypto asset manager, made a bold move this week by approaching the SEC: opening prediction markets for the 2028 presidential election through exchange-traded funds (ETFs). This initiative marks a turning point in how mainstream investors can participate in political betting, which was previously considered a niche.

Under the brand “Prediction Shares,” Bitwise applied to register two ETFs dedicated to 2028, allowing investors to bet on Democratic or Republican candidate victories without needing access to specialized platforms like Polymarket. In addition, the company registered four more products focused on the 2026 midterm elections, covering expected outcomes for the House of Representatives and the Senate.

From the 2024 boom to the institutional landscape of 2026-2028

Prediction markets gained exponential visibility during the last U.S. presidential election. Since then, the sector has experienced rapid growth, processing monthly trading volumes exceeding $10 billion. This increase reflects not only individual bettors’ curiosity but also a structural shift in how investors view prediction assets.

Bitwise’s strategy reveals a clear logic: replicate the success model of Bitcoin ETFs, which opened cryptocurrency to institutions and mainstream investors, this time targeting prediction markets. The 2026 midterms serve as a testing ground before the big prize: 2028. With two years’ lead time, the manager offers investors the opportunity to monitor political trends while testing mechanisms and regulatory compliance.

Prediction ETFs: democratizing political betting

Just as an investor can buy a Bitcoin ETF without holding the underlying cryptocurrency, these new products enable participation in prediction markets without using decentralized platforms or specialized clearinghouse accounts. Each fund invests its assets in bets supporting a specific outcome — for example, a Democratic victory in 2028 or a Republican one.

The approval of these ETFs is still pending before the SEC, but the application marks a significant change in how traditional financial products incorporate political speculation. The mechanism combines the familiarity of ETFs with the profitability of prediction markets, lowering entry barriers for institutional and retail investors.

BlackRock’s perspective: tokenization as financial modernization

While Bitwise moves pieces on the prediction market chessboard, Larry Fink, CEO of BlackRock, used his annual letter to shareholders to expand this conversation. Fink argued that tokenization and digital assets could fundamentally modernize the U.S. financial system, making issuance, trading, and access to investments faster, cheaper, and more democratized.

Fink framed this transformation as a response to inequality and strained public finances, advocating for clear rules on investor protection and digital identity. His stance does not represent naive adoption of technology but a strategic acknowledgment that digital assets — including prediction markets — are part of the future financial infrastructure.

The convergence between Bitwise’s strategy for 2028 and BlackRock’s vision of tokenization suggests a market in reorganization. The coming years will determine whether prediction market ETFs can scale institutionally or remain niche products. One thing is certain: 2028 will not only be about political elections but also about how the financial sector chooses to incorporate new investment instruments.