Polymarket set Lula's winning probability at about 20% before he ultimately won the Brazilian presidential election

Odaily reports: Polymarket set Luiz Inácio Lula da Silva's winning probability at about 20% and Flávio Bolsonaro's at 80% ahead of the Brazilian presidential election vote. Lula ultimately defeated Flávio Bolsonaro to win a fourth presidential term.

A large Polymarket trader, FhantomBets, said retail traders were bearish on Lula, which pushed up Bolsonaro's winning probability; he said professional traders believed Lula's winning probability should have been close to 30% to 40% on election day. Luke Nolan, a senior researcher at CoinShares, argued that the result should not be simply attributed to differences in judgment between professional traders and retail traders.

Both Nolan and Einar Knobel, co-founder and CEO of TxODDS, pointed out that Brazil's ban on prediction markets may be an important reason for the pricing deviation. Knobel said most market traders were from outside Brazil, and the market's trading volume was only 4.5% of that of the 2024 U.S. presidential election market; Nolan said an event with a 20% winning probability still has about a 20% chance of occurring. (Decrypt)