A crypto exchange, FTX has launched a new smart contract to enable Brazilian citizens and traders that can access the platform in permitted jurisdictions to bet on the outcome of the next presidential election.
Brazilians will make the decision at the polls on 2nd October 2022. The polling system of the nation is set to for a re-run if one of the two candidates don’t get more than 50 percent of the votes. The FTX contract will however expire at $0 if the elections are cancelled.
According to speculations, the re-election of Bolsonaro is far from certain as the nation is set to face health and economic crises.
The risk profile of the futures contract isn’t the same with Bitcoin. FTX has set the price to be equal to the probability of Bolsonaro reelection. Although, in reality other factors play a role in the contract, factors including capital costs, demand and supply.
As explained, if a trader forecasts the probability of Bolsonaro winning at 52 percent, the contract is traded at $0.52.
The current price at the time of this report is $0.488 with a 24h trading at about $3k. Traders on the futures contract are able to go long or short in their bets.
The chances of Bolsonaro winning the elections might be very slim. Citizens have hinted this is a recent poll held to evaluate his performance. A large 45 percent rated his performance as “terrible” while only 24 percent considered him positively.