Pew: Typical Polymarket User Trades Small, But Frequently

There’s big money floating around prediction markets, but that high-dollar trade size isn’t the norm on Polymarket, one of the largest all-or-nothing exchanges.

Pew Research sampled data on almost 12,000 Polymarket accounts that all placed trades on 10 high-turnover events earlier this year. The pollster analyzed publicly available data on those wallets spanning the May 7 to June 19 period, discovering that the “typical” Polymarket user isn’t placing large trades.

Polymarket operates on decentralized finance (DeFi) protocols, meaning that trades are settled on and posted to a public chain.

Polymarket Traders Break Even, Avoid Big Losses

Amid the rise of prediction markets, including increasing evidence that some traders are turning to these exchanges for supplemental income, critics worry that retail traders are rapidly losing capital as they serve as liquidity for professional traders and sharp bettors.

That’s not necessarily the case. Over the six-week period examined by Pew, the research firm found that the typical Polymarket trader broke even over that span or incurred minor losses.

That contradicts previously published data from other researchers indicating the bulk of retail traders on Polymarket lose money and that a scant percentage of traders on the platform are consistently profitable.

Pew points out that over the six-week period it evaluated, 7% of Polymarket traders notched profits of $1,000 or more while “9% lost a similar amount.”

Polymarket Traders Stay in Their Lanes

Prediction markets, including Polymarket, offer scores of derivatives on events ranging from economics to politics to pop culture to sports and much, much more. However, many Polymarket traders don’t dabble in areas they view as unfamiliar.

Pew observes that over the surveyed period, 75% of traders placed trades on just one subject area while 24% took trades in just one niche.

Fueled in part by the World Cup, sports traders were the most active cohort on Polymarket, placing an average of nearly six trades per day. On that note, it’s worth noting the timeframe studied by Pew included the NBA and NHL playoffs in addition to the World Cup.

Traders focusing on cryptocurrency took an average of 59 trades across five active trading days while traders of political event contracts were more restrained, taking 13 trades over seven active days, according to Pew.

“Traders who focus on sports also tended to make slightly larger trades: $9, on average, compared with $6 for those focused on politics and less than $4 for those focused on crypto,” concludes the research firm.