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A new SSRN working paper says Polymarket accuracy came less from crowd wisdom and more from a small trader group with a clear edge. Researchers also flagged 1,950 accounts with trading patterns that may point to non-public information.
Good to Know
The paper, “Prediction Market Accuracy: Crowd Wisdom or Informed Minority?” was published on April 20, 2026, and revised on April 25. Roberto Gomez-Cram, Yunhan Guo, and Howard Kung of London Business School wrote it with Theis Ingerslev Jensen of Yale University.
One part of the research focused on possible insider trading. The authors identified 1,950 accounts with timing and conviction patterns that suggested possible use of non-public information. Those accounts also had large price effects when they traded.
One case involved three accounts that bought into a contract tied to Venezuelan President Nicolas Maduro hours before a secret U.S. military operation on January 3, 2026. Together, they earned more than $630,000.
That finding changes how the Polymarket accuracy debate reads. Prediction markets such as Polymarket and Kalshi often frame their price accuracy as a product of many participants pooling views. The paper argues that the useful forecast signal came from a much smaller informed minority.
The authors reached that conclusion after analyzing full Polymarket transaction history, including 98,906 events, 210,322 markets, and $13.76 billion in total trading volume. They used a sign-randomization test to separate real skill from luck.
Only 3.14% of accounts qualified as skilled winners. Those traders averaged 79 markets each, kept profits outside the first sample, and usually traded in the direction of final results. The other 96% either lost money or broke even through chance.
Order flow showed the gap clearly. A one percentage point rise in skilled net buying matched an 8 basis point increase in the probability of the correct final outcome. Lucky winners had positive balances, but their trades did not predict prices or outcomes in a useful way.
Polymarket also grew sharply during the study period. Monthly volume rose from $3.3 million in December 2023 to $1.98 billion in December 2025. Active accounts increased from about 1,600 to more than 519,000. Even so, skill stayed highly concentrated.
The researchers found that skill also lasted. In a random split test, 44% of traders labeled skilled in training data kept that label in test data. Unskilled losers remained unskilled 51% of the time. Skilled mutual funds kept their label only 10% of the time in a parallel test.
Scheduled news tests gave the same result. Around FOMC announcements and corporate earnings releases, only skilled traders adjusted order imbalance in the direction of the news surprise. Other account groups showed no steady reaction.