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

Market forecast Polymarkt has come to the fore in recent history American elections, attracting a monthly trading volume just shy of $2.5 billion in October while more than $1.2 billion more was raised in November. Some users millions made betting on the elections– but ultimately the data suggests that most gamblers have actually lost money using the platform to date.

Polymarkt has allowed users to bet on the most events and cultural issues circulating this year, who will win the US presidential election and which actor will be the next James Bond. It has been around for years, but has skyrocketed in popularity over the course of 2024 thanks to election hype.

During the election season, Polymarket was increasingly cited mainstream media channels as an alternative source to traditional polls. In fact, Polymarket founder and CEO Shayne Coplan believes the prediction market was more accurate than the polls – after a A number of polls showed Harris would win while Trump has been steadily leading on Polymarket in recent weeks.

Despite its growing crystal ball reputation, a vast majority of Polymarket users have lost money. According to blockchain data collected by several Dune dashboards86% of accounts have a negative realized profit and loss margin, meaning a large majority of users have been wrong about their bets and/or sold at a loss.

Fortunately, the average bet size is not too large, with $100-$500 being the most common range at almost 28%, followed by $10-$50 at 26% and $0-$10 at 18% of the share.

Additional information from LowHub paints a slightly sharper balance, suggesting that around 88% of users are in the red when it comes to realized profits. According to LayerHub’s analysis, of the roughly 371,000 unique wallets on the platform, nearly 237,000 posted a loss of $100 or less. That is by far the largest category.

Only 4,004 wallets on Polymarket have realized profits of $1,000 or more per LayerHub. That’s just over 1% of the total number of unique wallets on the platform.

Prediction markets need both high-information users (possibly including insiders) and low-information users to create enough liquidity and potential profits to operate effectively, expert Thomas Reitz of the University of Iowa told me. Declutter in October. “It’s a balancing act,” he said.

In the case of Polymarket, based on the data, it is apparently the “dumb money” that takes most of the losses, allowing the “smart money” to amass significant profits.

It is also worth noting that the platform has seen an influx of users who are using the platform unlawfully in an attempt to… potential future token airdrop. This is done by repeatedly buying and selling positions on Polymarket through a method called “volume farming.” By doing this, many accounts end up losing money just a few dollars.

Polymarket is now facing a possible ban in France as the National Gaming Authority (ANJ) opened an investigation on Wednesday. The ANJ said it is currently “investigating”. [Polymarket’s] operation” to assess its compliance with French gambling legislation.

This investigation arose after trader Theo4, identified as a French citizen, profit of $47 million spread across four accounts with $45 million worth of bets. Nearly all of this money was spent on securing a second term in the White House, although Polymarket has disputed it foul play.

Chain analysis said late Wednesday that Theo4’s total profits may actually be $78.7 million, based on additional accounts that appear to be related. Whatever millions of dollars Theo4 ended up with, it’s clear that the whale’s huge win is a rarity among Polymarket users.

Edited by Andrew Hayward