Prediction markets are being pitched on social media as a lucrative side hustle for young Americans squeezed by rent and student debt. In reality, most traders are losing money, and often significant amounts.
- The bulk of profits, among the winners, were raked in by a small group of what appeared to be automated bots, according to an analysis of Polymarket trade records, while everyone else, in aggregate, lost $131 million.
- Polymarket has faced allegations of wash trading, coming from customers who are seeking cryptocurrency rewards, rather than a return on their trading.
- Prediction markets have quickly grown from a niche corner of finance to a multibillion-dollar industry attracting Wall Street capital. But a growing list of insider trading allegations is bringing concerns about the platforms all the way to the White House.
