A Bloomberg analysis found that most traders on prediction markets are losing money, often by significant margins.
Since January 2025, more than 100,000 Polymarket accounts have recorded losses of at least $1,000, nearly double the number of wallets posting comparable gains.
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According to the report, the bulk of winnings flowed to a small group of accounts that appear to be automated trading bots. Of the roughly two million wallets that have been active on the platform since the start of 2025, nearly half saw gains or losses of under $10.
This suggested that many users were simply testing out this form of wagering. Yet even within that casual cohort, the majority finished underwater.
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Separately, researchers from the University of Toronto, HEC Montréal, and ESSEC Business School examined Polymarket data. Their paper covered 2.4 million users and $67 billion in trading volume.
The study found 68.8% of users lost money since 2022. Meanwhile, the top 1% of traders captured 76.5% of all gains. The top 0.1% alone accounted for more than half of the platform’s total profits.
“Users who lose money trade considerably more often at extreme prices (below 10¢ or above 90¢) than users who gain: the bottom 95% of users place 56% of their trades at these prices, against 28% for the top 0.1% of earners,” the paper read. “We urge caution in interpreting this finding as representing skill (or information) since we lack the tools typically used to assess performance in financial markets.”
Bloomberg also noted that roughly 5% of bot-like wallets generated 75% of trading volume on Polymarket. Among those high-volume accounts, 823 netted more than $100,000 in profit each.
“These high-volume accounts collectively turned a profit of $131 million, mostly concentrated among 823 users that netted more than $100,000 each. The less active traders, meanwhile, lost the equivalent amount when all their wins and losses were added up,” the report read.
However, Joshua Della Vedova, a University of San Diego professor, found that retail traders actually picked the winning outcome more often than bots. They lost anyway because they entered positions later, at bad prices.
BeInCrypto has contacted Polymarket for comment on the findings and will update this story if it receives a response.
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