As Americans across the country head to the polls for the US midterm elections Tuesday, prediction market traders have spent months wagering on the outcome. According to an analysis by The Washington Post, nearly $1.9 billion in election-related contracts had traded on Kalshi and Polymarket as of Monday, marking record trading activity for a midterm election cycle.
Markets on both platforms favor Democrats winning control of Congress, with a Democratic sweep priced at 75% on Kalshi and 75.5% on Polymarket as of 4:30 p.m. UTC. Kalshi traders gave Democrats a 93% chance of taking the House and a 75% chance of winning the Senate, while Polymarket priced those outcomes at 94.5% and 75.5%, respectively.
The vote comes nine days after prediction markets failed to anticipate the outcome of Brazil's presidential election, with Flávio Bolsonaro favored at roughly 80% the day before incumbent President Luiz Inácio Lula da Silva won the runoff. Kalshi CEO Tarek Mansour reportedly cautioned that "a 5% probability doesn't mean it won't happen," according to CNBC.
For the crypto industry, a shift in congressional control could reshape the prospects for long-awaited regulatory clarity.
PAC spending may fall short in Ohio
A key race for crypto has centered on the Senate seat in Ohio, where Defend American Jobs, part of the Fairshake super PAC network, allocated 54% of its total expenses. According to the official website, $36.9 million was spent on supporting Senator Jon Husted and $19.7 million opposing the staunch crypto-critic, Democrat Sherrod Brown. Fairshake spent $40 million to help unseat Brown in 2024.
However, the flood of spending may be to no avail, with traders expecting a win for Brown. The Kalshi market for the race predicted a 72% chance for a Brown win and 72.5% on Polymarket, both in line with a final New York Times/Siena poll that had him ahead 49% to 44%.
A Brown victory could complicate the crypto industry's legislative agenda, particularly if Democrats regain control of the Senate. Analysts have identified him as a potential chairman of the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission, although the leadership position remains uncertain.
Related: From Uptober to Hacktober: Are Bitcoin's seasonal patterns becoming obsolete?
A pro-crypto shift in Maine
In Maine, however, a Democratic win predicted by traders could help the crypto industry expand its influence in Washington. Republican Senator Susan Collins was one of four Republicans who voted against advancing the CLARITY Act in September, stalling the bill in the Senate.
Kalshi gives Democrat Troy Jackson a 71% chance of unseating her, while Polymarket puts his chances at 71.5%, broadly in line with New York Times polls conducted in October that had Jackson ahead by two percentage points. Advocacy group Stand with Crypto rates Jackson as strongly supportive of crypto, potentially giving the industry another ally in the Senate should he win.
Predicting the coin flips
Although many prediction markets are broadly in line with polling results, traders have made clearer calls in three states where polls show close races.
In Alaska, Kalshi gives Democrat Mary Peltola a 71% chance of defeating Republican Senator Dan Sullivan, even though the final New York Times/Siena poll had her ahead by just two percentage points, 48% to 46%. Both candidates have expressed strong support for crypto, according to Stand With Crypto.
In South Carolina, where the candidates were tied at 48% in the New York Times/Siena poll, Kalshi gives Republican Senator Darline Graham, a crypto supporter, a 71% chance of defeating Democrat Annie Andrews.
Iowa remains a toss-up on both platforms, with Democrat Josh Turek overtaking Republican Representative Ashley Hinson on Polymarket at 52%, after months of Hinson being favored to win.
In other key races, prediction markets are broadly in line with the polls. In Michigan, Kalshi gives Democrat Abdul El-Sayed a 79% chance of defeating Republican Mike Rogers. Kalshi also gives Democrat James Talarico a 71% chance of defeating Republican Ken Paxton in Texas, while the final New York Times/Siena poll had Talarico ahead 50% to 43%. A Paxton loss would be a setback for the Digital Freedom Fund, a super PAC backed by Gemini's co-founders Cameron and Tyler Winklevoss that spent more than $81,000 supporting his campaign. However, Talarico has also expressed support for the crypto industry.
What traders expect after a sweep
Markets are also starting to look beyond today's vote to the political and economic landscape following a potential Democratic sweep of Congress. Polymarket's conditional markets suggest traders are pricing in a higher risk of recession under Democratic control of both chambers, with the implied probability of a US recession by the end of 2027 at 35% if Democrats sweep and 19% if they do not, as of 4:50 p.m. UTC.
