In a landmark move for the financial sector, asset manager Bitwise has officially filed with the U.S. Securities and Exchange Commission (SEC) for a first-of-its-kind prediction market-based Exchange-Traded Fund (ETF). The filing, confirmed by Bloomberg Intelligence's senior ETF analyst James Seyffart on March 21, 2025, proposes a fund branded 'PredictionShares'. This pioneering application represents a bold attempt to bridge the speculative world of event forecasting with the regulated, mainstream accessibility of public securities markets.
The proposed ETF would not directly hold prediction contracts but would track an index composed of publicly traded companies that operate within or enable prediction markets. These markets allow participants to trade contracts based on the outcome of future events, such as election results, economic indicators, and technological milestones. The filing arrives amidst a complex regulatory landscape where the SEC has recently approved several spot Bitcoin ETFs while maintaining a cautious stance on other crypto-related products.
Analysts suggest the novel structure may face rigorous regulatory scrutiny, with the SEC's Divisions of Corporation Finance and Trading and Markets expected to focus on the index methodology, liquidity of underlying holdings, and overarching market integrity concerns. The standard review period for a new ETF is up to 240 days, meaning a potential launch would likely not occur until late 2025 or 2026.
Separately, the nascent U.S. spot Bitcoin ETF market experienced a notable shift in sentiment, recording a collective net outflow of approximately $105 million on February 17, 2025. Data from analyst Trader T revealed a nuanced picture: BlackRock's iShares Bitcoin Trust (IBIT) saw an outflow of $119.8 million, while Fidelity's Wise Origin Bitcoin Fund (FBTC) attracted a modest $5.89 million inflow. Grayscale's newly launched Mini Bitcoin Trust saw a substantial inflow of $35.97 million, suggesting a potential fee-driven rotation within the market rather than a wholesale exit.
