Polymarket profits concentrate among 0.1% of accounts as most traders lose
Updated
Updated · The Wall Street Journal · May 4
Polymarket profits concentrate among 0.1% of accounts as most traders lose
8 articles · Updated · The Wall Street Journal · May 4
The analysis of 1.6 million accounts found fewer than 2,000 netted nearly $500m, while more than 70% of users lost money.
On rival Kalshi, there were 2.9 unprofitable users for every profitable one last month, as trading volume across both platforms surged to $24.2bn in April from $1.8bn a year earlier.
The report says sophisticated firms using algorithms, costly data feeds and high-frequency strategies dominate casual bettors, especially in risky “mention markets”, even as regulators scrutinise insider trading and market conduct.
With AI traders capturing most profits, are prediction markets a new form of investing or simply a high-tech casino?
As states sue to ban them, are prediction markets facing a legal battle that could shut them down nationwide?
In early 2026, Polymarket experienced explosive growth driven by over 1.29 million retail traders, with trading volume reaching $25.7 billion in March. However, this rapid expansion exposed serious governance flaws, including a $59 million dispute over a Ukraine-U.S. mineral deal and insider trading incidents, which eroded user trust and attracted regulatory scrutiny. Profits were highly concentrated among a small elite of automated bots and skilled traders, while 67% of users suffered losses due to behavioral biases and poor risk management. In response, Polymarket acquired a CFTC-licensed exchange and adopted a hybrid model combining decentralized trading with centralized compliance, backed by a $2 billion investment from the Intercontinental Exchange, aiming to balance innovation with regulation.