Assessment Reveals Polymarket's Predictions Staggeringly Correct at 94% Rate
Polymarket's Prediction Accuracy and Market Bias
According to data analyzed by Alex McCallow, a data processing specialist, the Polymarket platform demonstrates an impressive prediction accuracy of 94.1% four hours before a market's closure, as indicated by a dashboard on Dune. Even a month before an event is resolved, the accuracy level remains high, approximately 90%.
However, McCallow has pointed out that Polymarket markets exhibit bias, attributing this to the tendency to conform, herd instincts, and low liquidity. He also noted that investors often overestimate the probability of an event by one or two points.
Long-term forecasts tend to be more accurate, McCallow explained, as they often include improbable elements. For example, in the U.S. presidential election, the platform listed 17 candidates, including rapper Kanye West, indicating the long-shot nature of some predictions. However, it was evident that only Donald Trump and Kamala Harris had a realistic chance of winning.
When it comes to sports event markets, such as "one-on-one" matchups, the accuracy is lower, around 80%. As the event approaches, though, its accuracy increases.
McCallow admitted that his research was hampered by a lack of substantial historical data on Polymarket. In some segments he wished to analyze, the data seemed insufficient.
The volume of bets on the U.S. presidential election became a record on the platform, approaching $3.7 billion. Sports have become a rapidly growing sector, with significant events including the NBA Finals ($1.2 billion) and UEFA Champions League ($0.8 billion).
Forbes included Polymarket's founder, Shane Kaplan, in the "30 Under 30" list for 2025 in the "Finance" category.
In terms of the platform's operation, Polymarket taps into the collective knowledge of participants who have a financial stake in the outcomes. Automated Market Makers (AMMs) ensure continuous liquidity and moderate price changes based on supply and demand. The platform reflects real-time sentiment and probabilities, offering adaptability in predictions.
Investors on Polymarket's platform often engage in long-term investing, with accuracy levels for long-term forecasts remaining high, approximately 90%. Despite the high accuracy, Polymarket markets show a tendency towards bias, which is attributed to factors like herd instincts and low liquidity.
