Whales Won Millions Betting on Trump, But 86% of Polymarket Traders Have Lost Money

Prediction market Polymarket shot to prominence amid the recent U.S. election, attracting monthly trading volume loyal unnerved of $2.5 billion in October with over $1.2 billion more already racked up in November. Some customers made hundreds of hundreds making a bet on the election—but in the break, records suggests that nearly all bettors comprise surely lost money the exercise of the platform to this level.

Polymarket has allowed customers to bet on most events and cultural questions circulating this year, from who will secure the U.S. Presidential election to which actor would possibly be the next James Bond. It’s been spherical for years, but exploded in reputation over the route of 2024 as a outcome of election hype.

In the heart of election season, Polymarket turned into all over again and more quoted by mainstream media outlets as an change source to old school polling. No doubt, Polymarket founder and CEO Shayne Coplan believes that the prediction market turned into all over again appropriate than the polls—after a need of polls tipped Harris to secure while Trump turned into once step by step leading on Polymarket in recent weeks.

Despite its rising recognition as a crystal ball, a spirited majority of Polymarket customers comprise lost money. Primarily based totally on blockchain records smooth by multiple Dune dashboards, 86% of accounts comprise a detrimental realized profit and loss margin, meaning that a spirited majority of customers comprise been rotten about their bets and/or sold at a loss.

Fortuitously, the average bet measurement isn’t too spirited, with $100-$500 being essentially the most overall span at nearly 28%, adopted by $10-$50 at 26% and $0-$10 at 18% of the fragment.

Further records from LayerHub paints a fairly starker balance, pointing to about 88% of customers in the purple by manner of realized profits. Primarily based totally on LayerHub’s diagnosis, out of roughly 371,000 queer wallets on the platform, nearly 237,000 of them comprise posted an absence of $100 or less. That is the greatest class by some distance.

Simplest 4,004 wallets on Polymarket comprise realized profits of $1,000 or more, per LayerHub. That is loyal over 1% of total queer wallets on the platform.

Prediction markets need each and every excessive-details (doubtlessly including insiders) and low-details customers to make enough liquidity and doable profit to work successfully, expert Thomas Reitz of the University of Iowa urged Decrypt in October. “Or no longer it is a balancing act,” he said.

In Polymarket’s case, per the records, or no longer it is interestingly the “dull money” that is taking diverse the losses so as that the “animated money” can amass tall profits.

Or no longer it is moreover rate noting that the platform has viewed an influx of customers illegitimately the exercise of the platform in the strive to farm a doable future token airdrop. Here’s performed by normally shopping and selling positions on Polymarket in a formula called “volume farming.” By doing this, many accounts end up shedding money, albeit loyal a couple of dollars.

Polymarket now faces a possible ban in France because the country’s Nationwide Gaming Authority (ANJ) opened an investigation on Wednesday. The ANJ said it is currently “examining [Polymarket’s] operation” to evaluate its compliance with French gambling laws.

This scrutiny emerged after vendor Theo4, identified as French national, profited $47 million across four accounts from $45 million rate of bets. Nearly all of this money turned into once waged on Trump securing a 2d timeframe in the White Home, though Polymarket has disputed any putrid play.

Chainalysis said tedious Wednesday that Theo4’s total profits would possibly per chance surely tally to $78.7 million per extra accounts that seem like linked. Whichever multi-million-greenback haul Theo4 ended up with, it’s sure that the whale’s mountainous secure is a rarity among Polymarket customers.

Edited by Andrew Hayward