'Groundbreaking' prediction market ETFs launch delayed again as SEC reviews more: analyst
Quick Take
- “SEC wants to look at them a bit more. Doesn’t sound lethal, just more double checking disclosures,” said Bloomberg’s Eric Balchunas.
- More than 20 exchange-traded funds, from issuers like Roundhill and Bitwise, tied to political and economic outcomes, also suffered a delay last week.
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The U.S. Securities and Exchange Commission is taking more time to review prediction market ETFs that were expected to launch on Monday, according to Eric Balchunas, a senior ETF analyst with Bloomberg Intelligence.
"Prediction market ETFs delayed again, not launching today as planned," Balchunas wrote in a post to X. "SEC wants to look at them a bit more. Doesn't sound lethal, just more double checking disclosures."
A week ago, the more than 20 exchange-traded funds tied to political and economic outcomes also suffered a delay as the SEC needed more time to analyze how the products would function and the risks to investors. The SEC's decision to delay launching the funds impacts would be issuers such as Bitwise, Roundhill, and GraniteShares.
"These really are groundbreaking (and once they launch a precedent is set) so I get regulators wanting a little more time with them," Balchunas said.
While trading volume for the top prediction markets platforms, Polymarket and Kalshi, continues to rise, these new ETFs would offer investors a way to wager on the outcome of elections and economic events using the publicly traded financial instruments that have become popular across crypto in recent years.
ETF issuer Roundhill is seeking to launch multiple funds based on future presidential elections or which party will end up controlling the Senate and the House. With names like RPM Democratic President ETF, RPM Republican President ETF, RPM Democratic Senate ETF, and RPM Republican Senate ETF, these funds are designed to allow investors to earn gains if the targeted party wins.
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