How Polymarket Predicted the 2024 Election Better Than Every Poll

On election night 2024, cable news pundits were still hedging. Polling models showed a toss-up. FiveThirtyEight had the presidential race within a point. But Polymarket already knew. Hours before major networks called the race, Polymarket’s presidential election contract had moved decisively in one direction, pricing in what the polls were still unable to capture.

This was not a lucky guess. Polymarket’s election markets processed information from hundreds of thousands of participants putting real money behind their convictions, and the result was a probability estimate that outperformed every major polling aggregate. It was the most visible demonstration yet of a principle that economists have studied for decades: prediction markets, on average, are better forecasters than polls.

The Numbers Behind the 2024 Election Markets

Polymarket’s 2024 election markets were unprecedented in scale. The presidential election contract alone generated over $3.5 billion in total trading volume, making it one of the most liquid prediction market contracts in history. At peak activity, the order book was deep enough that six- and seven-figure trades moved the price by only a fraction of a cent.

The market attracted a diverse participant base: political operatives, data scientists, hedge fund traders, and casual observers. Each brought different information and analytical frameworks, and the market price reflected the weighted average of all of them — weighted by how much money each participant was willing to risk.

The key data points:

• Volume: Over $3.5 billion traded on the presidential election outcome across all related contracts.
• Unique participants: Hundreds of thousands of wallets interacted with election markets.
• Accuracy: Polymarket’s implied probability consistently tracked closer to the actual outcome than the RealClearPolitics polling average, FiveThirtyEight’s model, and the major betting odds aggregators.
• Speed: On election night, Polymarket repriced to reflect incoming results faster than any network’s decision desk could make a call.

Why Markets Beat Polls

Understanding why prediction markets outperformed polls is not just an academic exercise — it is directly relevant to how you should trade political events going forward.

Skin in the Game

This is the fundamental difference. A poll respondent has no cost for being wrong. They can tell a pollster whatever they want — their preferred candidate, the socially acceptable answer, or whatever comes to mind first. A prediction market participant is putting money at risk. If their assessment is wrong, they lose real capital. This creates a powerful incentive to be honest and accurate rather than expressive or aspirational.

The effect is measurable. Studies dating back to the Iowa Electronic Markets in the 1990s have shown that prediction markets outperform polls in the final weeks before elections roughly 75% of the time. The 2024 cycle confirmed this pattern at massive scale.

Real-Time Information Processing

Polls are snapshots. Even the best polling operations take days to field a survey, collect responses, weight the data, and publish results. By the time a poll is released, it is already reflecting information that is days old.

Prediction markets reprice in real time. When a major campaign event occurs — a debate gaffe, an endorsement, an October surprise — the market reacts within minutes. Traders who have faster or better analysis immediately update the price. This continuous information processing means the market price at any given moment reflects the most current available information, not last week’s snapshot.

Aggregation of Diverse Information

No single analyst, pollster, or model has access to all relevant information. One trader might have deep expertise in turnout modeling. Another might be plugged into on-the-ground campaign operations in swing states. A third might be running sophisticated models on early vote data.

The market price aggregates all of these perspectives simultaneously. This is the “wisdom of crowds” effect, but with a critical addition: participants are weighted by their conviction (how much they are willing to bet), which means better-informed participants tend to have a larger influence on the price.

Incorporating Non-Polling Information

Polls measure stated preferences. Markets can incorporate anything: early voting data, voter registration trends, ground game reports, ad spending patterns, fundraising numbers, legal challenges, weather forecasts for election day, and a thousand other variables that polling simply does not capture.

In 2024, some of the sharpest moves in Polymarket’s election markets came from early vote data and registration trends that were publicly available but not yet reflected in polling models. Traders who monitored these data sources in real time had a systematic edge.

How Election Markets Actually Work on Polymarket

For traders who want to participate in the next cycle, here is how the mechanics work. If you are new to the platform, our complete Polymarket guide covers the setup process and interface.

Contract Structure

Election contracts on Polymarket are structured as binary outcomes. A presidential election contract might ask: “Will Candidate X win the 2024 presidential election?” You can buy Yes or No shares. Yes shares pay $1.00 if the candidate wins and $0.00 if they lose. No shares pay the inverse.

Pricing and Liquidity

Prices are set by an automated market maker combined with a limit order book. As more participants buy Yes shares, the price rises. As more buy No, it falls. The price at any time is the market’s implied probability of the outcome.

During the 2024 cycle, liquidity was deep enough that retail traders could enter and exit positions of several thousand dollars without significantly moving the price. This is a marked improvement over earlier cycles where thin order books made large positions difficult to manage.

Settlement

Election contracts settle based on the official outcome — typically the certified election results. This means there can be a delay between election night and final settlement, especially if results are contested or recounts are underway. During this period, the market continues to trade, and prices reflect the evolving probability of the outcome being overturned or confirmed.

Lessons for Trading Political Events

The 2024 election taught several lessons that apply to any political event trading:

1. The Market Is Usually Right, But Not Always

Polymarket’s price was the best single predictor of the election outcome, but it was not perfect. There were periods where the market appeared to overshoot or undershoot based on temporary information cascades — large traders moving the price, which triggered momentum followers, which amplified the move beyond what the information justified.

The takeaway: respect the market price as the best available estimate, but recognize that it can be temporarily wrong. If you have a genuinely independent information source that disagrees with the market, it may represent an opportunity.

2. Liquidity Surges Create Opportunities

As events approach, liquidity increases dramatically. The presidential election market was far more liquid in October 2024 than it was in January 2024. High liquidity means tighter spreads, easier entry and exit, and more reliable price signals. It also means that mispricings, when they occur, are corrected faster — so you need to act quickly.

3. Correlated Markets Offer Hedging and Arbitrage

Polymarket offered contracts on not just the presidential race, but also Senate races, House control, individual state outcomes, popular vote margins, and more. These contracts are correlated, and when one moves, the others should adjust accordingly. Sometimes they do not adjust simultaneously, creating brief arbitrage opportunities.

For example, if a state-level contract reprices based on new polling data, the national-level presidential contract should also move — but there is often a lag of minutes or even hours. Traders who monitor correlated markets can capture these dislocations.

4. Exit Before Settlement When Possible

A contract trading at $0.92 the night before a likely outcome is confirmed offers limited upside ($0.08) with meaningful downside risk if something unexpected happens. In many cases, selling a winning position at $0.90 to $0.95 before final settlement is the better risk-adjusted play. This was a critical lesson from 2024 — several traders held positions through contested-result uncertainty that could have been closed at favorable prices earlier.

What to Watch for 2026 Midterms

The 2026 midterm elections will almost certainly generate significant prediction market activity, though likely at lower volumes than the presidential cycle. Here is what to watch:

• Senate control: Individual Senate race contracts and an overall Senate control contract will be the most liquid midterm markets.
• House control: Similar structure to Senate, though individual House race contracts may have thin liquidity.
• State-level races: Gubernatorial races and ballot initiatives in key states could generate tradeable contracts.
• Primary surprises: Primary elections often produce larger mispricings than general elections because polling is less reliable and turnout is harder to model.

The same principles that worked in 2024 — real-time data monitoring, cross-market analysis, and respecting the market’s informational edge while watching for temporary dislocations — will apply to 2026.

The Bigger Picture

Polymarket’s 2024 election performance was more than a trading story. It was a proof of concept for prediction markets as an information tool. Media organizations are increasingly citing prediction market prices alongside polling data. Policymakers have noticed. Academics are studying the data.

For traders, the implication is clear: political event contracts are not going away. The volume, infrastructure, and mainstream awareness are all growing. If you want to trade these markets profitably, the time to develop your analytical framework is now — before the next major cycle heats up.

Whether you prefer Polymarket’s crypto-based approach or a regulated exchange like Kalshi for US-based political markets, the edge comes from the same place: better information, faster processing, and disciplined risk management. For help deciding between platforms, our Kalshi vs. Polymarket comparison breaks down the tradeoffs for different trading styles.