Galaxy Research: 69% of Polymarket retail accounts lose money
Galaxy Research published an onchain analysis of 2.9 million Polymarket wallets on October 2, finding that 69% of retail accounts finished below break-even. The population lost $339 million in aggregate. Sports specialists fared worst among trader cohorts. The study examined behavior across the crypto-native prediction market platform, which has drawn heavy retail participation during high-profile political and cultural events.
Bernstein's $10 trillion prediction-market forecast depends on retail participation scaling smoothly into revenue. Galaxy's finding that most Polymarket retail traders lose money threatens that assumption. Equity analysts valuing Robinhood and Coinbase on event-contract growth must now model higher churn and lower lifetime value than consensus assumes. The $339 million aggregate loss figure gives shorts a concrete talking point against premium multiples.
If retail traders recognize the platform as a negative-sum venue, acquisition costs will rise and volume growth will slow. Polymarket's lead in political event volume becomes less valuable if it cannot retain users through losing streaks. The first operator to publish tools that improve retail win rates would flip the narrative and capture the traders competitors bleed.