Most prediction market contracts have low volume, leaving users exposed to volatility and bots

Closed Markets Under $10K

70%

Percentage of closed markets on Polymarket with reported volume under $10,000.

Closed Markets With No Volume

45,000

Number of closed markets on Polymarket that had no reported volume.

Markets Attracting $100K-$1M

10%

Percentage of closed markets on Polymarket that attracted between $100,000 and $1 million in reported volume.

§ 01 Executive Snapshot

What: Volume on prediction market platforms like Polymarket and Kalshi is predominantly low, leading to volatility and risks for traders.
Who: Key players include Polymarket, Kalshi, and various academic experts such as Constantin Bürgi and Eric Zitzewitz.
Why it matters: The prevalence of low-volume markets can deter retail traders and create challenges in market accuracy and reliability.

About 70% of all closed markets on Polymarket saw under $10,000 in reported volume from 2021 to May 2026.
Fewer than 10% of all closed markets attracted between $100,000 and $1 million in reported volume.
Over 45,000 markets had no reported volume whatsoever, indicating a significant number of inactive contracts.

Historically, prediction markets have seen fluctuating volumes, with notable spikes during significant events, such as elections.
The analysis of market volume highlights a broader trend of shallow markets in the prediction space, raising concerns about their attractiveness to traders.

The dominance of low-volume markets may discourage new traders due to high volatility and wider spreads, impacting overall market participation.
Long-term, as prediction market volume grows, the disparity between high and low-volume markets may persist, affecting market dynamics and trader strategies.

Low liquidity in markets can lead to price volatility, impacting traders' ability to execute profitable trades.
The presence of trading bots in shallow markets can distort volume metrics and create an uneven playing field for retail traders.

Continued monitoring of volume trends on platforms like Polymarket and Kalshi will be critical to understanding market health.
Future developments in regulation or market structure may signal changes in how these prediction markets operate and their appeal to traders.

§ 07

What are the main issues with prediction market volumes?

The main issues include predominantly low volumes leading to volatility and risks for traders, which can deter retail participation.

Who are the key players in the prediction market space?

Key players include platforms like Polymarket and Kalshi, along with academic experts such as Constantin Bürgi and Eric Zitzewitz.

How does low volume affect traders in prediction markets?

Low volume can lead to price volatility and wider spreads, making it difficult for traders to execute profitable trades.

Why is monitoring volume trends on prediction markets important?

Monitoring volume trends is critical to understanding market health and may indicate future changes in regulation or market structure.