<div id="readability-page-1" class="page">After stablecoins went mainstream with TradFi support last year, prediction markets seem poised to become the next success in crypto. Top players are positioning themselves for the potential growth despite regulatory uncertainty.<h2>Prediction market ETF race heats up</h2>Digital asset manager Bitwise filed for a prediction market-backed ETF under the brand ‘PredictionShares,’ noted Bloomberg ETF analyst James Seyffart.<div id="attachment_571825"><img src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/Bitwise-prediction-markets-ETF.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="779" height="443" original-src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/Bitwise-prediction-markets-ETF.png"/>Source: X/Seyffart</div>The filing was event contracts eyeing election outcomes in 2026 and 2028 across the House, Senate, and presidential candidates.Interestingly, the move echoed its 2026 outlook. Bitwise projected that prediction site Polymarket would hit a record high in open interest ahead of the 2026 midterms.<blockquote>“With U.S. midterms approaching and politics coming back into the frame, the platform will be firing on all cylinders in 2026.”</blockquote>The update also comes a few days after Roundhill Investments made the first move on the prediction market ETF race. And Seyffart expected more players would join the race.<blockquote>“This is not the first filing of this kind, and I think it’s extremely unlikely that these will be the last. The financialization and ETF-ization of everything continues.”</blockquote>Now Bitwise has made its move, and another firm, GraniteShares, has also shown interest in the prediction markets within the political segment. Besides, top trading firms such as Susquehanna (SIG) are also positioning for the market boom.<h2>CFTC clashes with states</h2>Prediction markets or event contracts are derivatives that allow users to speculate on future outcomes.For supporters, they involve users putting money on the line, which makes prediction markets’ data (odds and probability figures) more robust in risk management and hedging than that from traditional surveys.As such, major players, especially from the crypto industry, are rallying behind Commodity Futures Trading Commission (CFTC) chair Mike Selig to defend the federal regulator’s oversight in the segment. According to supporters, these are useful hedging tools that should be allowed to flourish, blaming states for overreach.However, most local states view prediction markets as gambling, no different from sports betting, and call for strict regulation and oversight. It remains to be seen whether CFTC will have the sole jurisdiction in the space.That said, the segment has recorded significant growth since the 2024 U.S. elections. In January 2026, the segment reached a new all-time monthly volume of $12.4 billion, surpassing $10 billion for the first time.<div id="attachment_571829"><img src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/Screenshot-2026-02-18-115917.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="809" height="334" original-src="https://imageproxy.pbkrs.com/https://ambcrypto.com/wp-content/uploads/2026/02/Screenshot-2026-02-18-115917.png"/>Source: Dune</div><hr/><h2>Final Summary</h2><ul><li>TradFi players are positioning for the prediction markets boom, with ETF issuers eyeing the 2026 midterms.</li><li>The segment crossed $10 billion of monthly volume for the first time in January.</li></ul></div>

COIN

IBIT

HOOW

Bitwise has filed for a prediction market-backed ETF named ‘PredictionShares,’ focusing on election outcomes for 2026 and 2028. This move follows Roundhill Investments' initial filing in the prediction market ETF race. The prediction market segment has seen significant growth, reaching a record monthly volume of $12.4 billion in January 2026. However, regulatory challenges persist as states view these markets as gambling, while supporters advocate for federal oversight by the CFTC.

- Stablecoins have gained traction, prompting increased interest in prediction markets as major players prepare for growth amidst regulatory uncertainties.  
- Bitwise filed for a prediction market-backed ETF that focuses on upcoming U.S. elections, anticipating a rise in open interest in platforms like Polymarket.  
- The prediction markets segment recently achieved a monthly volume of $12.4 billion, highlighting its significant growth since the 2024 U.S. elections.

Bitwise files for prediction market ETF: Election bets to go mainstream?