Polymarket trader lost over $2M after oversized bets and weak risk controls

A trader lost more than $2 million on Polymarket in just over a month, BeInCrypto reports, with a single position accounting for nearly 79% of the total loss.

Blockchain analytics account Lookonchain detailed the trader, identified as beachboy4, who placed 53 predictions over a 35-day period and won 27 of them — about a 51% win rate. The account said the trader’s average bet was roughly $400,000, the largest gain was $935,800, and the biggest loss was $1.58 million from a Liverpool "YES" position bought at $0.66. Lookonchain warned the trader treated Polymarket like binary sports betting rather than probability trading and highlighted losing-entry prices clustered between $0.51 and $0.67, which offered limited upside but a potential 100% downside.

Lookonchain urged several risk rules to avoid similar outcomes: avoid high-priced entries (be cautious above 0.55 and avoid 0.65+ without a clear edge), limit exposure to 3%–5% of total capital per outcome, manage positions dynamically with partial profit-taking or early exits, compare win rate to the break-even level, and stop trading markets where you lack an edge.

The episode echoes other recent crypto losses tied to leverage and poor sizing, the report said, and underscores calls for better probability discipline and risk-management education as traders shift into outcome-based markets.

Key Topics

Crypto, Polymarket, Lookonchain, Prediction Markets, Risk Management, Liverpool