DECRYPT · 2026-10-26 18:46 UTC

Why Prediction Markets Got the Brazilian Election So Wrong

Polymarket prediction market priced Luiz Inácio Lula da Silva at only 20% chance of winning Brazil's presidential election, but he won the second round decisively. Experts attribute the mispricing to Brazil's ban on prediction markets limiting local participation and retail investors diluting professional traders' influence on prices. Some traders claim retail investors kept Bolsonaro's odds artificially high until late in election night, while others argue thin liquidity and lack of local knowledge were the primary factors.

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