70% of Polymarket Traders Experience Losses as Elite 0.04% Reap Most Profits: Insights and Analysis

Recent data from blockchain analyst DeFi Oasis shows that a significant majority of Polymarket traders, approximately 70%, have incurred losses, while only 30% have turned a profit. Notably, a small fraction—0.04% of users—has earned over 70% of the platform's total realized profits, amounting to a substantial $3.7 billion. This information highlights the concentration of earnings within Polymarket, reflecting patterns also observed in traditional financial markets.

Key Takeaways

Losses vs. Profits: About 70% of Polymarket traders have reported losses, with only 30% gaining profits.
Profit Concentration: A mere 0.04% of traders amassed over 70% of total profits, totaling $3.7 billion.
Earning Thresholds: To earn over $1,000, traders must be within the top 4.9%, while the majority earned less than $1,000.
Market Trends: Polymarket continues to grow, with nearly 462,600 active traders and record trading volumes despite profit concentration concerns.
Broader Implications: The ongoing discussions about the ethics of prediction markets and their impact on retail traders are becoming increasingly relevant.

70% of Polymarket Traders Lost Money as Top 0.04% Captured Most Profits: Data

Deep Dive into Polymarket Performance

Analysis from DeFi Oasis, covering data from over 1.7 million Polymarket trading addresses, reveals that roughly 70% of users have faced losses. Conversely, only about 30% turned a profit. Remarkably, only 0.04% of these addresses claimed more than 70% of the profits, adding up to an impressive $3.7 billion.

The examination of transaction activities allowed researchers to assess how much users have gained or lost. Among the profitable traders, most earned modest amounts, between $0 and $1,000, though this group constitutes 24.56% of all addresses, claiming merely 0.86% of total profits. Traders aiming for $1,000 or more had to rank among the top 4.9% of participants.

Polymarket Traders - Dune Chart

Profit Distribution Reflecting Market Trends

The findings indicate that 668 addresses with profits exceeding $1 million account for 71% of the total realized gains. In contrast, more than 1.1 million addresses experienced losses of between $0 and $1,000, with some 149 addresses reporting losses exceeding $1 million each. DeFi Oasis clarified that their calculations include total sales and redemption amounts, minus the costs of purchases, and do not take into account unrealized profits or losses.

Interestingly, traders maintaining large open positions can show significant negative returns even when they might have considerable unrealized profits. This unbalanced distribution highlights broader trends in prediction markets, where seasoned traders and advanced algorithms often gain substantial profits at the expense of everyday participants.

This revelation has surfaced amid increasing scrutiny of Polymarket for potential conflicts of interest. Competing platforms like Crypto.com and Kalshi are developing internal market-making operations that trade directly against users.

Continued Growth Amid Profit Concentration

Notably, Polymarket remains robust despite the uneven profit distribution. The platform has reported nearly 462,600 active traders, with trading volumes hitting record highs. Following a three-year hiatus for regulatory reasons, Polymarket successfully resumed operations in the U.S. after beta testing in November, following a $1.4 million settlement with the CFTC in 2022.

The platform's founder, Shayne Coplan, recently reached billionaire status at age 27 and participated in a regulatory discussion organized by the SEC and CFTC. With significant investments boosting its post-money valuation to $9 billion—including a $2 billion commitment from the Intercontinental Exchange, which owns the New York Stock Exchange—Polymarket continues to expand its presence.

In defense of prediction markets, Ethereum co-founder Vitalik Buterin argued that these platforms offer a more reliable approach to truth-seeking than social media, pointing out that financial stakes incentivize accuracy. However, this topic has prompted ethical debates, especially in light of potential profits that could affect real-world events.

Intensifying Competition as New Entrants Join the Market

In November, Google Finance integrated real-time data from Polymarket and Kalshi, allowing users to access market probabilities directly via search results. This innovative feature enables users to track event changes and sentiment fluctuations.

Additionally, FanDuel launched its FanDuel Predicts platform in December, partnering with CME Group to provide event contracts linked to crypto prices, commodities, and economic indicators. Meanwhile, Coinbase has initiated legal actions against states like Michigan, Illinois, and Connecticut regarding prediction markets, as it prepares for a January 2026 launch with Kalshi.

As mainstream adoption of prediction markets accelerates, trading volumes across major platforms hit $44 billion in 2024. On-chain prediction market activity rose significantly, increasing from under $100 million per month earlier in the year to over $13 billion. Meanwhile, Kalshi secured $300 million at a valuation of $5 billion.

The concentration findings highlight the crucial role prediction markets play in retail trading, although they also point to the fact that many participants are effectively subsidizing the profits of a small elite group. Moving forward, it remains uncertain whether enhanced regulatory clarity and the entry of institutional players will lead to improved outcomes for retail traders.