U.S.-linked wallets traded $571 million in political contracts on Polymarket over the past year despite a legal ban, outpacing every other nation including Hong Kong's $422 million, according to on-chain analysis firm Allium. The platform blocks U.S. users by IP address because it cannot legally serve them, but crypto rails render the restriction unenforceable — a VPN and a self-custody wallet are sufficient to bypass geofencing, and on-chain behavior tags wallets to countries regardless of masked IP. Allium's methodology captures only about 6% of political-market wallets by country, so the figures are directional rather than exact, but the pattern is clear: the largest single national cohort on the platform is the one legally prohibited from accessing it.
The data reveals what Americans bet on when offshore. Geopolitics accounted for 46% of U.S. notional volume against 36% platform-wide, while elections drew just 16% from U.S. wallets versus 32% across all users — Americans trade foreign wars at nearly triple the rate they trade elections. Five of the twelve largest U.S. markets were Iran-war bets, and the single biggest, at $20.8 million, was a novelty contract on whether Ukrainian President Volodymyr Zelenskyy would wear a suit. These are largely the markets regulated U.S. venues do not carry. Kalshi and Polymarket's compliant U.S. arm stick mostly to economic data, rate decisions, and elections, so demand flows to the offshore version that lists regime change and ceasefires.
Performance data undercuts any narrative that offshore access creates an information edge. U.S. wallets backed the winning outcome 81.9% of the time on resolved markets against 80.3% for all others, effectively no difference, and returns were nearly identical. Americans bet more boldly — at one point placing 53% of their volume on a U.S. invasion of Iran when the rest of the market sat at 26% — but picked winners no better. The report suggests that blocking access did not end U.S. participation but moved the largest single political-market cohort offshore, visible on-chain but beyond U.S. oversight, with demand tilting toward exactly the markets U.S. rules restrict.
For traders, this matters because it confirms that prediction-market liquidity is now structurally offshore and retail-driven rather than institutional. The data points to continued growth in Polymarket volume regardless of U.S. policy. No position here — offshore participation is already the baseline, not a new catalyst — but the next catalyst to watch is whether legal developments bring geopolitics onshore, which would fragment liquidity and likely compress spreads on overlapping markets.
Source: CoinDesk