The ERShares Private-Public Crossover ETF (NASDAQ:XOVR) has invested $30 million in Kalshi, making the federally regulated prediction market operator one of the fund's largest private-company holdings. The investment, announced as part of the ETF's latest rebalance, marks XOVR's first major private-market allocation since its early bet on Space Exploration Technologies Corp (NASDAQ:SPCX) helped validate the private-public crossover investing model.

The move comes just days after Space Exploration Technologies Corp. (NASDAQ:SPCX) surged from its initial public offering to inclusion in the Nasdaq-100 in just 15 trading sessions, a milestone ERShares believes underscores the advantage of gaining exposure to private companies before they enter major public indexes. While passive ETFs only began accumulating SpaceX after its index eligibility, XOVR had invested in the company in August 2024, allowing shareholders to participate in years of private-market value creation before the IPO.

Kalshi Becomes XOVR's Next Private-Market Bet

Kalshi operates a Commodity Futures Trading Commission (CFTC)-regulated prediction market exchange, where participants trade event contracts tied to real-world outcomes across the economy, public policy, weather, sports and culture. The company has experienced rapid growth in trading activity, expanded its range of contract categories and attracted increasing participation from both retail and institutional investors, recently completing a major funding round to support further expansion.

ERShares said it identified Kalshi through its proprietary VC Lens framework, which seeks to identify category-defining companies before they become widely represented in public equity benchmarks.

"SpaceX demonstrated the strategy. Kalshi is where our VC Lens is pointing next," Founder and Chief Investment Officer Joel Shulman said. He added that XOVR was created to provide investors with access to private equity opportunities alongside publicly traded innovation leaders in a transparent, Nasdaq-listed ETF.

Chief Investment Strategist and Chief Operating Officer Eva Ados said prediction markets are becoming an increasingly important part of financial infrastructure because they transform uncertainty into market-based prices within a regulated framework.

"Kalshi seeks to turn uncertainty into a price. That is why we believe prediction markets matter. They give investors, institutions, businesses and individuals a real-time signal on future outcomes inside a regulated market structure," Ados said.

Building on the SpaceX Playbook

The Kalshi investment follows a period of strong performance for XOVR, which returned 27.45% during the second quarter of 2026. According to ERShares, its SpaceX investment generated approximately $135 million in unrealized appreciation during the quarter, including roughly $84 million in June, accounting for about 75% of the ETF's June return.

The firm increased its SpaceX position twice in the weeks preceding the company's IPO, with the holding now valued at approximately $350 million. ERShares also said it turned away more than $1 billion in potential inflows before the IPO to reduce dilution risk for existing shareholders, arguing that accepting additional assets would have diluted existing investors' exposure to the private holding.

In a recent interview, Shulman said SpaceX's rapid transition from IPO to the Nasdaq-100 marked a turning point for crossover ETFs, arguing that the company's public debut validated—not diminished—the strategy of investing in late-stage private companies.

"Passive funds owning SpaceX today simply confirms what our shareholders participated in years earlier," he said, adding that private-market investing requires disciplined company selection, valuation governance and liquidity management rather than simply adding private holdings after they become popular.

Private Equity Inside an ETF

ERShares relaunched XOVR in August 2024 as what it describes as the first ETF to provide private equity exposure through a private-public crossover structure, combining select private-company investments with publicly traded innovation stocks using its proprietary ER30TR Index, which is independently calculated by LSEG.

The asset manager said the fund has established several industry firsts, including becoming the first ETF to hold private equity investments, the first to increase private-company exposure beyond 15% through a liquidity arrangement, and the first to implement a Shareholder Protection Plan designed to help limit shareholder dilution ahead of major repricing events.

With approximately $2.1 billion in assets under management as of July 9, XOVR is positioning Kalshi as the next company that could benefit from its early-stage investment approach. As venture-backed companies continue to stay private for longer and investors seek access before public listings, the latest investment suggests ERShares is looking to repeat the formula that made SpaceX one of the defining success stories of the ETF's crossover strategy.