Traditional Finance Acknowledges Prediction Market Power
In a significant validation for the forecasting sector, New York Stock Exchange (NYSE) President Lynn Martin stated on Wednesday that prediction market outcomes have become critical inputs for traditional financial market participants. Speaking at Mar-a-Lago, Martin highlighted how traders are increasingly looking to platforms like Polymarket and Kalshi to steer their strategies in equity and bond markets, according to CoinDesk.
This institutional embrace coincides with a surge in financial products aiming to package these insights for retail investors. On Wednesday, asset manager Bitwise filed to list two new ETFs under the branding "Prediction Shares," specifically designed to track betting markets regarding the outcomes of the 2026 midterms and the 2028 presidential election. As reported by CoinDesk, these filings signal a deepening tie between Wall Street and event contracts.
GraniteShares Joins the ETF Race
Bitwise is not alone in this initiative. GraniteShares has also joined the fray, filing prospectuses alongside Roundhill to offer similar exposure. Cointelegraph notes that a total of six U.S. election prediction market ETFs are now in the pipeline, allowing public investors to gain exposure to election volatility without trading directly on prediction exchanges. For traders analyzing the underlying data of these potential ETFs, resources like PredictionMarketsTools.com remain essential for tracking the raw volume and sentiment shifting these odds.
Nevada Sues Kalshi Following Court Ruling
While Wall Street pushes for integration, the regulatory landscape remains contentious at the state level. On Wednesday, the state of Nevada formally sued prediction market operator Kalshi. This legal action was triggered immediately after a federal appeals court rejected Kalshi's bid to pause state enforcement actions. According to Decrypt, the ruling has left the platform with limited options to halt state-level interventions.
Kalshi is now seeking to have the Nevada lawsuit heard in federal court, maintaining its long-standing argument that it is subject exclusively to federal commodity exchange laws under the CFTC, rather than state gaming regulations. Cointelegraph reports that this jurisdictional battle is becoming a central theme in 2026.
Industry Mobilizes Defense
In response to what CFTC official Michael Selig described as an "onslaught of state-led litigation," the industry is organizing. The Digital Chamber launched a "Prediction Markets Working Group" on Wednesday to advocate for federal preemption and regulatory clarity. The group aims to champion the sector's economic utility while supporting the CFTC's primary oversight role.