Crypto’s $176 million midterm gamble meets its moment of truth

US midterm voters go to the polls Tuesday with Democrats favored to take control of Congress, potentially reshaping cryptocurrency regulation as nearly $1.9 billion has been wagered on election-related contracts across Kalshi and Polymarket. The markets priced a Democratic sweep at 75% on Kalshi and 75.5% on Polymarket as of 4:30 p.m. UTC, with Democrats at 93% and 94.5% to win the House and 75% and 75.5% to win the Senate, respectively.

Voters will decide all 435 House seats and 35 Senate races, determining control of Congress for the final two years of President Donald Trump’s second term. Republicans entered Tuesday’s midterms with 219 seats in the House of Representatives and 53 in the Senate, according to the Blockchain Association’s election dashboard. Crypto industry groups have spent roughly $176 million across more than 100 races this election cycle, according to an Oct. 27 Reuters report, with Coinbase, Ripple and Andreessen Horowitz among the main financiers of the Fairshake political network.

Ohio’s Senate contest is a major test, with industry groups spending more than $50 million opposing Democrat Sherrod Brown, a longtime crypto critic. Defend American Jobs, part of the Fairshake super PAC network, allocated 54% of its total expenses to the race, spending $36.9 million supporting Republican Jon Husted and $19.7 million opposing Brown. Kalshi predicted a 72% chance for a Brown victory, while Polymarket estimated 72.5%, broadly matching a final New York Times/Siena poll showing Brown ahead 49% to 44%.

In Maine, Kalshi gives Democrat Troy Jackson a 71% chance of unseating Republican Sen. Susan Collins, while Polymarket places his chances at 71.5%. Collins was one of four Republicans who voted against advancing the CLARITY Act in September, and advocacy group Stand with Crypto rates Jackson as strongly supportive of crypto. Other closely watched races include Republican Sen. Pete Ricketts facing independent Dan Osborn in Nebraska, where Ricketts has received nearly $11 million in Fairshake spending, and Republican Ken Paxton facing Democrat James Talarico in Texas, where the Winklevoss-backed Digital Freedom Fund has supported Paxton.

The legislative consequences could be significant regardless of the result. The CLARITY Act would divide oversight of crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission and establish rules for intermediaries, but the Senate failed to advance it in a 49–50 procedural vote on Sept. 15, short of the 60 votes required. Republican sponsors said their final draft incorporated substantial ethics concessions sought by Democrats, while Democratic Sen. Mark Warner cited insufficient safeguards against Trump profiting from his administration’s crypto policies.

Prediction markets received a reminder of their limits nine days earlier, when Brazil’s presidential election ended with incumbent President Luiz Inácio Lula da Silva defeating Flávio Bolsonaro, who had been favored at roughly 80% the day before the runoff. Kalshi CEO Tarek Mansour cautioned that “a 5% probability doesn’t mean it won’t happen,” according to CNBC. Whether the forecasts prove similarly unreliable or the polls deliver their favored outcomes, crypto’s lobbying operation has already committed its biggest midterm wager.