Election betting supercharged Polymarket’s success in 2024, but trading volume and user numbers have tanked since Donald Trump was named president-elect this week.

With the prediction market’s biggest bets — which had a cumulative volume of $3.7 billion and made up the bulk of the platform’s activity — going up in a puff of jackpot payouts to its biggest winners, questions mount abut whether Polymarket can ever recapture the same buzz.

“This is a major challenge for them,” Claude Donzé, a principal at venture capital firm Greenfield, told DL News. “I would be surprised if they can get another bet of similar size.”

The comment comes as trading volume on Polymarket crashed 84% overnight, according to Dune Analytics. Daily active users dropped by 53% to a little more than 24,000 after the election.

DeFi Llama also shows a 64% crash in money being gambled on Polymarket.

The decline poses a challenge for a platform hailed as an attractive use case for crypto. So, what do experts think is next for Polymarket?

Political to the core

The first option is for Polymarket to stay focused on politics. After all, the US elections catapulted the concept of prediction markets into the mainstream.

“The product market fit for a prediction market, and an election is as good as it can get,” Rennick Palley, founding partner at early-stage venture firm Stratos, told DL News.

“It happens every four years, people are anticipating what’s going to happen, and there’s a huge amount of media coverage.”

It was inevitable that trading volume and user numbers would decline after the election, Douglas Campbell, an economics professor at the New Economic School and founder of Insight Prediction, told DL News.

Still, those numbers are higher than last year, and Polymarket’s core user base of political punters is as keyed in as ever.

“In the immediate future, Trump’s chaotic transition should be fun,” Domer, one of Polymarket’s most prolific pseudonymous traders, told DL News.

“Trump has made a lot of big and ridiculous promises, and it’ll be interesting to see what he follows through on.”

There are other green shoots for Polymarket, namely betting on sports.

All in on sports

Four of the top five largest non-political markets by total volume were for sports, excluding the yet-to-be-resolved political markets.

The fifth is a gamble on which 2024 film will be the highest-grossing.

Over $700 million is riding on who will win the Super Bowl next year. Bettors have another $359 million speculating on the winner of the Champions League.

The trend is clear, but two factors risk blocking Polymarket’s success.

For one, political bets are much easier to find liquidity compared to sports bets, which are are not open for as long, Greenfield’s Donzé told DL News.

“Within seconds, you have a dramatic change in the results, which makes liquidity provision very difficult,” he said.

Sports betting can be more challenging for Polymarket because it has no formal market makers that keep markets liquid and ensure buyers and sellers are always available.

Instead, it is peer-to-peer and incentivises individuals to provide liquidity to different markets with rewards in the stablecoin USDC.

That means the company will “never be able to scale for sports betting” as they can’t meet the demand, Benjamin Stursky, an analyst at Delphi Digital, told DL News.

The second reason is brand association. Carving out market share in sports betting is a big ask for Polymarket, especially after it has tied its success to politics.

“Polymarket has been so successful because the same chart showing Trump versus Harris has been repeated millions of times in mainstream media,” said Palley.

“People think about that image and think of Polymarket when they think about the election. The same kind of brand association is going to be a lot harder to create with more ephemeral things like sports.”

Polymarket didn’t reply to multiple requests for comment about its post-election strategy.

For political bettors, there is still plenty of inbound action — such as the midterm elections, when Americans will vote for members of Congress in 2027 — to look forward to.

“The next big US election is only two years away,” Campbell said.

Liam Kelly is DL News Berlin-based DeFi Correspondent. Got a tip? Email at liam@dlnews.com.