Polymarket is getting bigger, but the latest data shows that most Polymarket traders still lose money. A new on-chain study by researcher Andrey Sergeenkov, based on 2.5 million Polymarket wallet addresses through April 1, found that 84.1% of Polymarket traders are in the red. Only 2% made more than $1,000 across their full history, and just 840 wallets, or 0.033%, earned more than $100,000. That matters because Polymarket is no longer a small crypto side project. It has become the biggest on-chain prediction market and now sits much closer to mainstream finance, sports, and global news.
The gap between winners and losers looks even sharper when you zoom in. Sergeenkov tracked USDC flows on Polygon across buys, sells, redemptions, splits, and merges. That gave him a fuller picture than earlier research, which helps explain why his loss rate was worse than a December 2025 study that found 70% of traders were unprofitable. The pattern at the top is also telling. Only a tiny slice of Polymarket traders averaged serious monthly profit, and many of the wallets that cleared $5,000 a month were active for only one month. In plain terms, most Polymarket users come in, trade for a short time, and leave.
That weak retail record stands next to fast platform growth. MLB named Polymarket its exclusive prediction market exchange partner on March 19. Reuters reported the deal could be worth about $300 million over three years. At the same time, prediction markets have gone from niche crypto trading to a market watched by banks, analysts, and trading desks. TRM Labs said monthly volume across prediction markets climbed from about $1.2 billion in early 2025 to more than $20 billion by early 2026. Polymarket’s own 2025 trading volume topped $22 billion in the first 11 months, while monthly active traders reached the high hundreds of thousands in late 2025.
The trading action helps explain why Polymarket keeps growing even while most Polymarket traders lose. In these markets, price acts like probability. A contract trading at 74 cents implies a 74% chance. When war risk, oil shocks, or election headlines hit, Polymarket prices move fast because traders are putting money behind their view, not just answering a survey. Volume often jumps at the same time. That mix of fast price discovery and heavy volume is why some investors now treat Polymarket as a live sentiment signal for macro risk. When geopolitical tension rises, odds on oil, conflict, and policy markets can move before slower analyst notes catch up.
But the same price and volume action that makes Polymarket useful also helps skilled traders beat slower users. A paper from IMDEA Networks found that arbitrage traders extracted about $40 million from Polymarket during its study period. The top wallet made about $2 million across 4,049 trades, or roughly $496 per trade. The research showed that the biggest gains often went to traders using bots, market-making systems, and speed-based strategies. Retail Polymarket traders reacting by hand to breaking news often arrive after the market has already moved.
That is where the ethics debate becomes hard to ignore. As Polymarket expands into sports and geopolitics, more people are asking whether every live event should become a market. The backlash grew after Polymarket hosted markets tied to the fate of US troops and rescue outcomes, then removed them after criticism. The broader concern is simple: Polymarket may be useful as a signal tool, but Polymarket also creates a system where conflict, death, and fear can turn into trading volume. Supporters say prediction markets help measure real-time expectations. Critics say they can cross a moral line and may need tighter rules.
Polymarket is now trying to improve the platform itself. On April 6, it announced what it called its biggest infrastructure change since launch: a rebuilt trading engine, upgraded contracts, and a new collateral token called Polymarket USD, backed 1:1 by USDC, to replace bridged USDC.e. The upgrade is meant to improve execution and reduce friction. That may help the platform scale, but it does not solve the basic problem shown in the data. Better rails do not guarantee better outcomes for Polymarket traders. If anything, faster markets may make life even harder for users who trade on impulse.
The bigger story is that Polymarket is growing in two directions at once. It is becoming more important as a market signal, and less forgiving as a place for casual traders. That split helps link the whole picture together. Polymarket can be influential, liquid, and fast, yet still be a losing game for most people on the platform. Unless Polymarket adds better education or low-risk practice markets, the next wave of Polymarket traders may keep learning the same expensive lesson.