With prediction markets favoring Democrats for control of both chambers of Congress in the US midterm elections, experts say such an outcome could intensify scrutiny of crypto and push legislative efforts to the back burner.
According to data reported by The Block on November 3, in the early afternoon in the US, Polymarket and Kalshi priced the likelihood of Democrats winning a majority in the House of Representatives at 94 percent. The odds of a Senate majority were 76 percent on Polymarket and 75 percent on Kalshi.
These prices, set before the polls closed, reflect the expectations of people trading on the platforms, not the election outcome. The election will decide all 435 seats in the House of Representatives and 35 of the Senate’s 100 seats.
Committee control could bring the biggest change for crypto
A shift in control of Congress could also change the leadership of committees that determine which issues take priority. In crypto, attention is focused on the possibility that figures such as Elizabeth Warren and Sherrod Brown could gain influence on committees overseeing digital assets.
Experts who spoke to The Block last month said that if Democrats take control, scrutiny of crypto could intensify, while new legislative efforts could receive less attention. Issues that could be examined include the crypto wealth amassed through World Liberty Financial, which is linked to Donald Trump’s family.
So the election could affect not only the distribution of seats in Congress, but also whether new rules or oversight take center stage in Washington’s crypto agenda.
Crypto critic Brown is favored in Ohio
In the closely watched Ohio race, Kalshi put former Senator Sherrod Brown’s chances of defeating incumbent Jon Husted at 71 percent. Brown, known for his criticism of crypto, is being watched for what his return could mean for potential changes on committees.
New Jersey Senator Cory Booker, one of the figures involved in crypto legislation, had a 98 percent chance of winning on the same platform.
Elections have moved away from the center of prediction markets
Although the platforms drew significant interest during the 2024 presidential election, politics’ share of total trading volume has declined. According to Bloomberg data cited in the report, politics accounted for just 1 percent of the volume on each of Kalshi and Polymarket in October; during the 2024 election period, that share was above 60 percent.
We previously covered how election uncertainty is reflected in investors’ positions in our report on the preference for hedging against a downturn in Ethereum options.
Not investment advice.