US midterms: Prediction markets favor Democrats in key crypto races
Kalshi and Polymarket price a 75% chance of a Democratic sweep, days after markets misjudged Brazil’s runoff.
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.
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.