Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert & block trade
Convert crypto with one click and zero fees
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Polymarket's 25% Fake Volume Poses a Risk to the Trustworthiness of Prediction Markets

Polymarket's 25% Fake Volume Poses a Risk to the Trustworthiness of Prediction Markets

Bitget-RWA2025/11/07 15:40
By:Bitget-RWA

- Columbia researchers found 25% of Polymarket's trading volume is artificially inflated via wash trading, peaking at 60% in December 2024. - The study attributes this to Polymarket's fee-free model and pseudonymous wallets enabling linked accounts to manipulate volume metrics. - Sports markets showed 45% artificial activity, raising concerns about prediction markets' reliability as public sentiment indicators. - Polymarket's planned U.S. re-entry under CFTC regulation faces scrutiny amid claims that 48% o

Researchers from Columbia University have discovered that as much as a quarter of all trading on Polymarket—a major blockchain-based prediction market—may be artificially boosted through tactics like wash trading. The study, led by Yash Kanoria from Columbia Business School and Rajiv Sethi from Barnard College, reveals that repeated transactions between related accounts have skewed the platform’s reported trading volumes, according to a

.

To uncover these patterns, the team created a network analysis tool that flagged wallets frequently trading with each other but rarely interacting with outsiders. Their research, which appears on the open-access site

, suggests that, on average, 25% of trades over the last three years were wash trades, with the proportion spiking to 60% in December 2024.

Polymarket's 25% Fake Volume Poses a Risk to the Trustworthiness of Prediction Markets image 0
The report highlights that sports-related markets were especially impacted, with 45% of trades deemed artificial, while crypto markets saw only 3% of such activity.

While the study stops short of accusing Polymarket of direct involvement, it points to certain platform features that facilitate this behavior. These include no transaction fees, which make repeated trades inexpensive, and the use of pseudonymous blockchain wallets, which allow users to operate multiple accounts. Polymarket has yet to issue a formal response, stating it is currently evaluating the study.

This news comes as Polymarket sees a spike in user activity, fueled by its recent announcement of a POLY token airdrop and its intention to re-enter the U.S. market. In October 2025, the platform reported more than 477,000 active users and $3 billion in trades, representing a 48% monthly jump in users and double the previous month’s trading volume, as reported by

. Yet, the research indicates that much of this apparent growth could be due to non-genuine trading rather than real market interest.

The study’s results cast doubt on the reliability of prediction markets as tools for harnessing collective intelligence. Wash trading, which is illegal in regulated U.S. markets, can deceive participants by inflating perceived liquidity and demand. The authors stress that being able to separate legitimate trading from artificial volume is essential for accurately gauging Polymarket’s true market position and for preserving confidence in prediction markets as trustworthy reflections of public opinion.

Artificial trading is not exclusive to Polymarket. Research from 2022 found that 70% of trading on unregulated crypto exchanges was inflated by wash trades. Polymarket’s situation stands out due to its rapid expansion and its upcoming U.S. relaunch, which could subject it to greater regulatory oversight. The company plans to return to the U.S. market through QCX, a CFTC-regulated exchange, after settling with regulators in 2022 over unlicensed trading.

At the same time, rival platform Kalshi has been gaining popularity, especially in sports prediction markets, though its non-blockchain design makes it less transparent for academic analysis. The overall prediction market industry is thriving, with Kalshi reporting $4.4 billion in trading volume for October.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

IPO Genie's commitment to compliance opens up private market investing to a wider audience

- IPO Genie's $IPO airdrop attracts 300,000+ participants via tiered pricing and compliance-first blockchain infrastructure. - Platform combines AI-driven deal analysis, CertiK-audited smart contracts, and Fireblocks custody to address crypto market risks. - Token holders gain 32% staking yields and DAO governance, while $500M in tokenized assets bridges retail access to private markets. - Structured vesting schedules and 18-24 month cliffs aim to stabilize value, contrasting past failures like FTX through

Bitget-RWA2025/11/07 17:26
IPO Genie's commitment to compliance opens up private market investing to a wider audience

ICP Sees 30% Price Jump in Late October 2025: Institutional Interest and Web3 Goals Ignite Fresh Bullish Momentum

- ICP token surged 30% in late October 2025, driven by institutional partnerships and Web3 AI advancements. - Coelacanth Energy's partnership with ICP Securities and biopharma trial boosted demand through acronym confusion. - ICP's AI integration in smart contracts highlights innovation but lags behind competitors in brand recognition. - Lack of on-chain data complicates analysis, leaving speculation about genuine user activity vs. institutional hype. - The surge may signal a new bullish cycle if ICP clari

Bitget-RWA2025/11/07 17:22
ICP Sees 30% Price Jump in Late October 2025: Institutional Interest and Web3 Goals Ignite Fresh Bullish Momentum

Bitcoin Updates: Fed Divided Over Rate Reduction Amid Conflicting Inflation and Employment Concerns

- Fed officials debate December rate cuts amid conflicting inflation data and labor market risks, with no consensus on policy path. - Short-term inflation expectations rose to 4.7% in Nov 2025, while long-term forecasts stabilized at 3.6%, reflecting cautious public confidence. - Government shutdown delays critical economic data, forcing policymakers to rely on limited information as officials warn against both high rates and rapid cuts. - Tech/industrial firms showed resilience with strong Q3 earnings, co

Bitget-RWA2025/11/07 17:00

LUNA Rises 10.0% in a Day Despite Market Fluctuations

- LUNA surged 10.0% in 24 hours on Nov 7, 2025, but remains down 78.51% year-to-date amid broader crypto market declines. - Analysts attribute the short-term rebound to buying activity, yet highlight persistent bearish trends and macroeconomic uncertainties. - Technical indicators show LUNA trading below 50-day and 200-day moving averages, reinforcing the continuation of a long-term downtrend. - Backtesting suggests sharp price surges like LUNA's 5%+ daily gains historically lack sustained momentum without

Bitget-RWA2025/11/07 16:58