Polymarket: Retail Traders Lose While Bots Win

Polymarket attracts millions of crypto traders, but the majority do not come out ahead. Galaxy analyzed 2.9 million accounts considered retail on the international platform. Result: 69.2% end below their break-even point. Together, they accumulate $338.9 million in losses. Automated accounts show $246.8 million in gains.

Most Crypto Traders End Up in the Red

Galaxy relied on Polymarket’s public history: orders, positions, entry prices, and payments are all recorded on-chain, allowing the study to track activity over several years. The analysis considers about 2.9 million accounts with behavior resembling human users.

Among this group, 69.2% are losing. This result continues an observation made earlier in the year. In April, another study dedicated to Polymarket and Kalshi already showed that the majority of users lost money.

However, Galaxy’s new research adds an important nuance. The median loss remains low: about $3 per account. Half of the traders fall between a loss of $36.64 and a gain of only $0.40.

The $338.9 million is therefore not evenly distributed among users. A small portion of accounts concentrate the major damage. At the first percentile, losses reach about $4,804. At the other end, the 99th percentile shows about $3,381 in profit. Many lose little. A few lose a lot.

Bots Earn $246.8 Million

The contrast becomes much clearer when Galaxy isolates automated accounts. The study identifies 125,429. Together, they show about $246.8 million in profits. This category notably includes accounts used for market making, arbitrage, or certain automated strategies.

Not all bots win, however. Galaxy notes that some mainly perform many trades to profit from trading rewards.

The most sophisticated profiles nevertheless have tools different from those of retail users who simply choose “Yes” or “No” on an event.

The market has become huge. In the second quarter, the notional volume of prediction markets reached $113.8 billion, up 48.7% over three months. Sports already represented 81% of Polymarket’s volume in June.

Galaxy precisely finds this dominance reflected in behaviors. Traders specializing in sports are the least profitable among the major categories studied. Technology and science specialists achieve the best results.

Knowledge of the subject therefore seems to matter. About 44.1% of traders concentrate more than 60% of their activity in a single category. Another detail: profitable traders take slightly larger positions on average. Their median position reaches $13.96, compared to $10 among losing accounts.

Polymarket Continues to Attract More New Users

These numbers come as prediction markets are no longer a marginal crypto product. Since its launch in 2020, Polymarket recorded about 1.27 billion orders on 3.07 million wallets, for $82.8 billion in notional value according to Galaxy. The study, however, covers the international platform, distinct from Polymarket’s US app.

New users also continue to arrive through major sporting events. During the World Cup, 60% of Polymarket users studied had never used crypto before. For many, the prediction market thus becomes a first entry point into the ecosystem. Yet Galaxy observes that losing quickly pushes some users out. After a losing position, 15.2% of accounts made no new trade during the following 30 days. After a win, only 6.1% stopped for that long.

Winning encourages continuation. Losing much less so. The final observation is quite simple. Polymarket can aggregate information and produce useful probabilities. This does not mean its users make money. Among 2.9 million retail accounts studied by Galaxy, nearly seven out of ten end in the red. And while they accumulate $338.9 million in losses, automated accounts show $246.8 million in profits.