Polymarket is on track to achieve its most active month ever, with trading volumes climbing to nearly $2 billion by October 28, 2024. This is a sharp increase from the $503 million recorded in September, making it over 3.2 times higher—and with five days still left in the month, the final tally could be even more impressive. Alongside these trading numbers, the platform saw a significant rise in user activity, growing to over 191,000 active traders, more than double September's 80,514.

• Polymarket’s October volume hit $1.97 billion, over three times September’s $503 million. 76%-91% of October’s volume relates to the U.S. presidential election.

• Monthly active traders surged to over 191,000, surpassing September’s 80,514 users.

• Large-scale pro-Trump bets drive Polymarket odds, pushing Trump to a 66% chance of victory.

• Heavy whale activity distorts market predictions, raising questions about market efficiency.

• Robinhood's election betting product adds competition, potentially drawing more participants.

Much of this explosive growth is linked to the upcoming U.S. presidential election, where traders are wagering on the outcome between Donald Trump and Kamala Harris. October 24 set new records for both daily trading volume and user engagement, while open interest—the total value of unresolved bets—reached an all-time high of $287 million.

Polymarket monthly volume | Source: TheBlock

A small group of traders, referred to as “whales,” are influencing Polymarket’s predictions in unexpected ways. Notably, one of the most active whales, under the alias "Fredi9999," has poured millions into "yes" shares predicting Trump’s victory. As of October 26, Trump’s odds on Polymarket stand at 66%, significantly higher than most national polls, which show a much tighter race.

The influence of these whale traders raises concerns about the reliability of Polymarket’s predictions. With over $46 million in open positions favoring Trump, analysts question whether these bets reflect genuine market sentiment or if a few wealthy individuals are distorting the odds.

Harry Crane, a statistics professor at Rutgers University, suggests two possibilities: “Either these whales have insider knowledge, or they’re moving the market irrationally by sheer volume.” This activity has caused Polymarket’s odds to diverge from traditional polling, which still gives Harris a slight edge.

Polymarket’s monthly active traders | Source: TheBlock 

One issue complicating Polymarket’s performance is limited liquidity. Despite boasting $4 billion in cumulative volume, only around $300 million in open orders exists across the entire platform at any given time. This makes the market vulnerable to sudden price spikes, as demonstrated on October 25, when a $3 million bet briefly pushed Trump’s odds to 99%.

Polymarket operates as an order-book exchange, meaning prices are determined by available buy and sell orders. When large traders dominate one side of the market, prices can fluctuate sharply, leading to doubts about whether the platform’s predictions are a true reflection of public sentiment.

Kalshi’s poll on US Presidential elections 2024 

Polymarket is not alone in capturing election-related excitement. Competitors like Kalshi and Robinhood are also making waves with new prediction market products aimed at election bettors. Kalshi recently launched election event contracts after winning a court battle that allowed it to operate legally in the U.S. In just a few weeks, Kalshi has amassed nearly $87 million in volume, driven by questions like “Who will win the 2024 U.S. Presidential Election?”

Robinhood has also introduced election contracts through its derivatives platform, offering users a way to speculate on the race between Trump and Harris. Although limited to U.S. customers, Robinhood’s new offering aims to bring more casual traders into the election betting scene, with a focus on accessibility and real-time decision-making.

Read more: Top 7 Decentralized Prediction Markets to Watch in 2024

With so much of Polymarket’s volume tied to the U.S. election—between 76% and 91% according to the platform’s own data—the key question is whether it can maintain this momentum after November 5. While there are signs of diversification, such as a spike in non-election-related bets on October 7, the platform’s future growth will depend on whether users remain engaged beyond this single event.

Prediction markets are gaining traction as an alternative to traditional polling, with platforms like Polymarket promoting themselves as a more accurate forecasting tool. However, the heavy influence of a few whale traders raises doubts about the reliability of these predictions.

As Douglas Campbell, an economics professor at the New Economic School, puts it, “When one trader can control 10% of the market, the wisdom of the crowd becomes questionable.”

Polymarket’s rise reflects a growing interest in decentralized prediction markets, but the platform faces challenges from whale traders and liquidity constraints. Competitors like Kalshi and Robinhood are adding new layers to the election betting ecosystem, increasing competition while offering traders more options.

The coming weeks will test whether Polymarket’s momentum can extend beyond Election Day or if its growth will taper off once political interest subsides. With more than 178,000 monthly users and a surge in high-stakes bets, Polymarket is at the forefront of a new era in event-based trading. Whether this growth proves sustainable will depend on the platform’s ability to diversify, manage liquidity, and maintain user interest long after the 2024 U.S. election is decided.

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