Odaily Planet Daily reports that before the Brazilian presidential election, Polymarket set Luiz Inácio Lula da Silva’s probability of winning at approximately 20% and Flávio Bolsonaro’s at 80%. Lula ultimately defeated Flávio Bolsonaro to secure his fourth term as president.
A large trader on Polymarket, FhantomBets, stated that retail traders' bearish sentiment toward Lula has driven up Bolsonaro’s probability of winning; he noted that professional traders believe Lula’s chance of winning on election day should be around 30% to 40%. Luke Nolan, Senior Researcher at CoinShares, argued that the outcome should not be simplistically attributed to a divergence between professional and retail trader judgments.
Nolan and Einar Knobel, co-founder and CEO of TxODDS, both noted that Brazil’s ban on prediction markets may be a significant cause of pricing distortions. Knobel stated that most market participants are based outside Brazil, and the market’s trading volume is only 4.5% of that of the 2024 U.S. presidential election market; Nolan added that events with a 20% probability of occurring still have approximately a 20% chance of happening. (Decrypt)