Galaxy Digital says Brazil election upset does not undermine prediction market accuracy
GLXY•Galaxy Digital said prediction markets remained useful hedging tools despite assigning Luiz Inácio Lula da Silva an 11% to 20% chance of winning Brazil’s Oct. 25 runoff. The Ibovespa fell 13.9% in the first post-runoff session, while the real lost more than 8%.
1. Markets and hedging
Galaxy Digital’s analysis argued that Brazil’s election upset did not show prediction markets were ineffective. Lula “Yes” contracts priced near 20 cents paid five times the stake, offering protection against losses in Brazilian stocks. Kalshi Research’s analysis of more than 2.2 million resolved markets found that prices generally reflected outcome probabilities, with accuracy improving near resolution.
