Key Points
- The Tema Trading & Prediction Markets ETF (DICE) launched Sept. 9, giving investors pre-IPO exposure to privately held Kalshi and Polymarket through a special purpose vehicle.
- Prediction market trading volume is surging—Kalshi set a daily record of $3.9 billion on Oct. 4, and the industry is projected to reach $1 trillion by 2030.
- Despite strong growth forecasts, DICE remains small, with about $2 million in assets, and has fallen more than 3% since its inception, reflecting elevated risk and volatility.
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Prediction markets have experienced a precipitous rise in popularity this year. Now, thanks to a new ETF launched in September, investors can gain exposure to two of the biggest platforms while they are still privately held—and potentially ahead of future IPOs.
While the services offered by prediction market platforms blur the line between traditional financial markets and sports and events wagering, event contracts are financial derivatives. The Commodity Futures Trading Commission (CFTC) says event contracts traded on regulated prediction markets are typically structured as swaps and fall under its oversight.
Still, the demand for prediction market platforms is undeniable.
According to the 2026 Betterment Retail Investor Survey, released on Aug. 11, more than half of Gen Z investors surveyed said they had redirected funds otherwise intended for investing into sports betting in the past year. And 14% of respondents said they do so several times a month.
That interest has translated into explosive trading growth. Kalshi, the world’s largest regulated prediction market, set a record for daily trading volume on Oct. 4 when $3.9 billion in contracts traded on its platform. Over the trailing 30 days, that figure stands at nearly $67 billion, while the company generates revenue by charging transaction fees on trades placed through its platform.
Industry-wide, prediction markets are expected to reach $1 trillion in trading volume by 2030, good for nearly 20-fold growth over the next five years.
The New ETF That’s Betting Big on Prediction Markets
The Tema Trading & Prediction Markets ETF (BATS: DICE) is one of 13 ETFs built and managed by Tema, an asset manager focused on actively managed funds targeting growth and core investment themes.
The fund invests in contemporary prediction markets, trading platforms, data providers, and other critical market infrastructure. Most notably, it provides pre-IPO exposure to Kalshi and Polymarket via a special purpose vehicle (SPV).
Since launching on Sept. 9, trading volume has been light, and the fund has only around $2 million in assets under management (AUM)—a drop in the bucket compared to longer-established thematic ETFs that have attracted significant investor interest and seen outsized performance thanks to recent market trends.
But according to data from industry consultancy firm Grand View Research, that may not be the case for long.
The global prediction market is forecast to undergo a compound annual growth rate (CAGR) of 66.7% from 2025 to 2033. The North American segment was the largest revenue-generating market in 2025, while Australia is expected to register the highest CAGR between 2026 and 2033.
Additionally, Grand View Research now forecasts that the global fantasy sports market will grow at a CAGR of 13.3% from 2026 to 2033, with the application-based segment accounting for 78.1% of the market in 2025.
That is good news for the companies that comprise the DICE ETF’s portfolio.
Inside DICE’s Prediction Market Portfolio
In addition to Kalshi and Polymarket, the Tema Trading & Prediction Markets ETF's top holdings include Interactive Brokers (NASDAQ: IBKR), Coinbase Global (NASDAQ: COIN), Robinhood Markets (NASDAQ: HOOD), and Intercontinental Exchange (NYSE: ICE), which owns businesses including the New York Stock Exchange (NYSE), the ICE Futures exchanges and the ICE Clear clearinghouses.
Notably, Kalshi and Polymarket via their respective SPVs account for about 15.6% of DICE’s portfolio. Coinbase and Robinhood, which are the fund’s third- and sixth-largest holdings, respectively, also offer prediction markets on their platforms.
Coinbase rolled out its Kalshi-powered prediction markets nationwide on Jan. 28, 2026, while Robinhood launched its dedicated Prediction Markets Hub on March 17, 2025, after first offering election event contracts in October 2024.
On either of those platforms, as well as Kalshi and Polymarket, users can place wagers on everything from political elections and sporting events to crypto price movements, Oscar and Grammy winners, and natural disasters.
Holdings like Interactive Brokers and Intercontinental Exchange—which togther account for another 10% of the fund—provide exposure to global exchanges, data providers, and the clearinghouses that facilitate trade clearing and settlement.
Investors Should Expect Growing Pains
With such a small asset base, the Tema Trading & Prediction Markets ETF faces as many hurdles as the Olympic track teams that speculators can wager on via prediction markets. Since its inception, shares have slid more than 3%, and without a significant increase in trading volume, the fund could struggle to remain viable.
Additionally, the financial well-being of its top two holdings—Kalshi and Polymarket—remains opaque as both are privately held companies.
While Kalshi CEO Tarek Mansour has ruled out a public debut in 2026, recent reports suggest the company could pursue an IPO as soon as 2027.
Polymarket raised $1 billion in late August 2026 at a $21 billion valuation, versus an approximately $40 billion valuation reportedly being finalized for Kalshi. The company has strategic backing from NYSE owner Intercontinental Exchange, but it has not announced a target IPO date.
Meanwhile, two of the fund’s publicly traded holdings—Robinhood and Coinbase—introduce elevated volatility to the fund with betas of 2.35 and 3.41, respectively, making them considerably more unpredictable than the broad market.
But for investors with higher risk tolerances, investing in DICE could be the most direct way to gain exposure to both publicly and privately held prediction markets before the industry experiences explosive growth.
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