Prediction markets pitched as side hustle — but most traders are losing money
More than 100,000 users on Polymarket lost at least $1,000 since early 2025, nearly double the number who made that much
Prediction markets are exploding in popularity as a supposed side hustle for cash-strapped Americans. But new data suggest the reality looks a lot more like gambling — and most people are losing.
An analysis of blockchain data from Polymarket, one of the largest event-betting platforms, found that the vast majority of users are in the red. Since January 2025, more than 100,000 accounts lost at least $1,000 — almost twice as many as those who made that much, a Bloomberg News analysis found.
Even among the roughly two million active wallets, nearly half made or lost less than $10, suggesting many users are dabbling. Still, most ended up losing money.
A market dominated by bots
The biggest winners weren’t casual traders — they were highly active, bot-like accounts.
Researchers found a small group of high-frequency traders accounted for most of the activity and profits. These accounts executed dozens — sometimes hundreds — of trades per day and collectively netted about $131 million.
By contrast, everyday users — trading far less frequently — lost roughly the same amount in aggregate.
“What looks like peer-to-peer betting is increasingly dominated by sophisticated players,” said researchers analyzing the data.
Even correct bets can lose money
One of the more surprising findings: retail traders often picked the right outcome — but still lost money.
Why? Timing.
Less experienced users tended to enter markets late, buying at worse prices. Meanwhile, high-frequency traders got in early and locked in better odds.
“The execution edge is an underrated aspect of trading,” said Joshua Della Vedova, who studied the data, Bloomberg reported.
That means even being right isn’t enough — you also have to trade like a professional.
A familiar pattern in a new market
The results mirror long-standing research on retail investors in stocks and crypto, where a small percentage of traders capture most gains.
A study co-authored by Charles Martineau found about 69% of Polymarket users have lost money since 2022, while the top 1% captured roughly three-quarters of all profits.
Unlike stocks, however, prediction markets come with a sharper downside: if you’re wrong, you can lose 100% of your bet.
Affordability watch: “Not a rent strategy”
Despite the hype on social media, experts say prediction markets are a risky way to try to make extra income — especially for younger users facing high rent and student debt.
Profitable traders tend to have capital, discipline, and clearly defined strategies — not the profile of someone looking for quick cash.
Data box: Prediction markets by the numbers
100,000+ accounts lost at least $1,000 since Jan. 2025
~2x more losers than winners at that threshold
$131 million: total net losses by everyday traders
$131 million: total net gains by high-frequency traders
69%: share of users who’ve lost money since 2022
Top 1%: captured ~75% of profits
Up to 100% loss on a single bad bet
What this means for consumers
Prediction markets may look like investing — but they behave more like a high-speed trading arena where experienced players have the edge.
For most users, the data show:
You’re competing against bots and pros
Being right isn’t enough — price and timing matter
Losses can be total, not partial
In other words, what’s marketed as a side hustle may function more like a casino — one where the house isn’t a company, but a handful of sophisticated traders.
Quick checklist: before you “trade the news”
Treat prediction markets like gambling, not income
Never risk money you can’t afford to lose بالكامل
Watch out for “easy money” claims on social media
Understand that high-frequency traders dominate pricing
Remember: most users lose — even when they’re right
Bottom line: Prediction markets are growing fast — but for most participants, they’re not a path to extra income. They’re a fast-moving, high-risk environment where a few players win big and the majority quietly lose.