US-based ETF issuer Round Hill Investments has applied to US securities regulators to launch six exchange-traded funds (ETFs) tied to event contracts related to the outcome of the 2028 US presidential election.
ETF analyst Eric Balciunas told XPost on Saturday that the ETF product “could be game-changing” if approved.
“It opens up a huge door to all kinds of things,” Balciunas said, adding that while prediction market applications are easy to sign up for, ETFs “are just that much easier.”
Round Hill Investments filed on Friday with the U.S. Securities and Exchange Commission to launch six ETF products that allow investors to speculate on the outcome of the 2028 U.S. presidential election.
“In pursuit of its investment objectives, the Fund seeks investments in, or exposure to, a unique type of derivative instrument known as an event contract,” the filing states.
ETFs include Round Hill Democratic President ETF, Round Hill Republican President ETF, Round Hill Democratic Senate ETF, Round Hill Republican Senate ETF, Round Hill Democratic House ETF, and Round Hill Republican House ETF.
Roundhill Investments warns investors of risks
The filing said the purpose of the election-winning ETF’s purpose was to deliver “capital appreciation,” but warned that the other five ETFs could lose nearly all of their value.
sauce: Eric Balchunas
“This convergence results in a sudden and significant increase or decrease in the Fund’s NAV value, which is highly unique among other investment products,” the filing states.
The filing also warned investors that U.S. regulations regarding event contracts are “evolving” and any changes to how event contracts are classified or “restricted” could impact the fund.
“Political outcome event contracts are the subject of increased regulatory scrutiny and debate, and regulators may conclude that some or all of such contracts should be restricted, suspended, modified or prohibited,” the filing said, adding that investors uncomfortable with regulatory uncertainty should avoid purchasing the stock.
CFTC leans toward favorable stance toward prediction markets
On February 5, Cointelegraph reported that the U.S. Commodity Futures Trading Commission withdrew a Biden administration-era proposal to ban sports and political prediction markets, one of the most popular event contracts today.
Meanwhile, Ethereum co-founder Vitalik Buterin said he was starting to become “concerned” about the direction of prediction markets, hinting at a shift toward a market that hedges consumers’ risk of price fluctuations.
Buterin said in the X post that prediction markets are “overly focused” on “unsound” products that focus on short-term price bets and speculative behavior rather than long-term construction.