TREE NEWS reports: Polymarket priced Luiz Inácio Lula da Silva at roughly 20% to win Brazil’s presidential election before voting, with Flávio Bolsonaro at 80%, and Lula went on to win a fourth term. Large trader FhantomBets said retail traders were bearish on Lula, inflating Bolsonaro’s odds, while professional traders saw Lula at close to 30%-40% on election day. CoinShares researcher Luke Nolan and TxODDS CEO Einar Knobel pointed to Brazil’s ban on prediction markets as a key source of the mispricing; Knobel said the market drew most traders from outside Brazil and carried only 4.5% of the volume of the 2024 U.S. presidential market.
Polymarket priced Lula at ~20% to win Brazil presidency; he won
AI take
The miss is less about polling failure than about who was actually trading: a market largely cut off from the country it was pricing, drawing mostly foreign participants and a fraction of the liquidity seen in the U.S. election, is a thin and skewed sample rather than a forecast. The gap between retail sentiment and professional pricing on election day suggests the headline number reflected positioning, not probability. Whether restricted-access, low-liquidity political markets keep producing these gaps — and whether traders treat their prices as informative at all — is the open question.
Generated by AI for reference only.
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