Researchers Question the ‘Wisdom of Crowds’ on Polymarket

Study finds Polymarket's accuracy driven by informed minority, not crowd wisdom.

A group of scholars from the London Business School and Yale University analyzed transactions on Polymarket from 2023 to 2025. The authors concluded that the platform’s forecast accuracy is driven by an ‘informed minority’ rather than the ‘wisdom of crowds’.

Only 3.14% of users were identified as ‘skilled winners’. This group, along with market makers, captures more than 30% of the total profits on the platform.

The study covered 1.7 million accounts and transactions amounting to $13.76 billion.

However, overall income does not always indicate a trader’s skill. The analysis showed that only 12% of the most profitable accounts truly possess a strategy. About 60% of ‘lucky users’ began to incur losses when market conditions changed. Most participants (67%) remain in the red due to lack of experience or bad luck.

The researchers also found signs of insider trading. They identified 1,950 accounts that executed trades just before significant events and ceased activity after their conclusion.

As an example, they cited bets on the resignation of former Venezuelan President Nicolás Maduro. Trades occurred shortly before the U.S. officially announced the military operation ‘Absolute Resolve’ to capture the politician.

The findings contradict the stance of Polymarket and Kalshi’s leadership. The heads of these companies often claim that prediction markets outperform experts due to the collective intelligence of participants.

In April, the U.S. Department of Justice charged active-duty serviceman Gannon Kane Van Dyke, who is suspected of using classified information for betting on Polymarket.