Question: Oh, Magic 8 Ball, will the Securities and Exchange Commission approve prediction-market ETFs? Answer: Ask again later.

Last week, the SEC instructed staff to seek public input on exchange-traded funds tied to election results and economic data outcomes. Prediction markets remain largely uncharted territory for both exchange-traded funds and traditional finance overall. Bringing one of investing’s most trusted wrappers into what many still view as pseudo-gambling is a major decision, and regulators appear determined to move carefully. “If these make it to market, it will set a precedent that’s hard to undo,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. “You’d be letting the genie out of the…