Assessment of Polymarket's Forecast Precision Yields Staggering 94% Success Rate
Polymarket's Prediction Accuracy: An Analysis
Polymarket, a prominent prediction platform, exhibits an average prediction accuracy of 94.1% four hours before market closure, according to data provided by Alex McCallow, a data processing specialist. Even a month before an event is resolved, the accuracy level remains impressive, hovering around 90%.
However, McCallow warns of inherent biases in Polymarket markets, citing participants' propensity to conform, follow the herd, and contribute to low liquidity. This, in turn, influences the prediction results. In an interview for the platform's blog, McCallow suggested that investors tend to overestimate event probabilities by one or two points.
Long-term forecasts generally show higher accuracy, McCallow explained, as they often incorporate improbable elements, such as the inclusion of 17 candidates, including rapper Kanye West, for the U.S. presidential election. Nevertheless, it was evident that only Donald Trump and Kamala Harris had genuine contention for victory.
The accuracy of sports event markets, like "one-on-one" matchups, is lower, around 80%, due to the dynamic nature of the matches. However, precision increases significantly as the event approaches.
McCallow's research faced constraints due to the limited historical data available on Polymarket. In some segments he wished to analyze, the data appeared insufficient.
The volume of bets on the U.S. presidential election broke records on the platform, approaching $3.7 billion. Sports betting has experienced rapid growth, with major events like the NBA Finals and the UEFA Champions League attracting significant investment.
Polymarket's founder, Shane Kaplan, was recognized by Forbes as one of the top financing professionals under 30 in 2025.
In terms of prediction market accuracy, various factors come into play, including information availability, market liquidity, participant diversity, and regulatory constraints. The complexity and unpredictability of political events contrast with the data-driven and stable nature of sports markets, leading to different accuracy outcomes. AMMs and AI further bolster market robustness and adjustment to new information.
Investing in Polymarket's prediction markets can yield impressive returns, with accuracy levels for long-term forecasts frequently hovering around 90%. However, it's essential to be aware of inherent biases in these markets, such as the tendency for participants to overestimate event probabilities by one or two points.
