Deep DiveRegulationJul 30, 2026
Tokenized Equities Meet Prediction Markets: The Regulatory Arbitrage Window Is Closing
The convergence of tokenized real-world assets and institutionalizing prediction markets has created a regulatory arbitrage window that is narrowing fast. With $8.7 billion in prediction market ETF AUM, $187 million in daily volume, and Arcus's broker-dealer-anchored launch on Robinhood Chain, institutional capital has already made its allocation decision — the question is which custody and compliance models survive the coming SEC/CFTC framework consolidation. This report maps the competitive landscape across Polymarket, Kalshi, Hyperliquid, and Arcus, assesses the probability-weighted outlook through 2028, and provides actionable guidance for allocators, builders, traders, and regulators.
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