Brazilians Can Now Bet on President Bolsonaro’s Reelection Bid on FTX

Crypto derivatives exchange FTX has launched a futures contract that allows Brazilian voters and traders in jurisdictions where the platform is available to bet on the outcome of Brazil’s next presidential election. With health and financial crises looming in the country, Jair Bolsonaro’s second term as head of state is far from certain.

FTX Launches Bolsonaro 2022 Futures Contract

The new futures contract, Bolsonaro 2022, expires at $1 if the current president wins the election and to $0 if he fails, FTX announced. Brazilians will head to the polls on Oct. 2, 2022, but if no candidate receives more than 50% of the vote, the winner will be determined in a second round to be held on Oct. 30. In case the presidential election is canceled, or no winner is announced by the end of 2022, the contract will expire at $0.

The risk profile of Bolsonaro 2022 is different from BTC as the chances of large moves in either direction are significantly higher, the broker noted. In theory, the price should be equal to the probability of reelection, crypto news outlet Portal do Bitcoin commented. That is, if a user estimates Bolsonaro’s chances at 52%, the contract should be trading at $0.52. In reality, however, other factors such as demand and supply as well as capital costs also play a role. At the time of writing, the recorded price is $0.488 and the 24h volume hovers around $3,000.

Covid Crisis, Economic Outlook Hurt Bolsonaro’s Candidacy

Bolsonaro’s chances of winning the election are not great. Recent polling data shows that 45% of Brazilians evaluate his administration as “terrible” while only 24% approve it. The president’s popularity tumbled largely as a result of the worsening health and economic situation over the past year.

With 435,000 deaths so far, Brazil has among the worst Covid-19 death rates in the world. Figures released earlier this year suggested that South America’s largest economy shrank by 4.1% in 2020 and is expected to grow only by 3.6% this year. Unemployment currently exceeds 14%. Add to all the numerous corruption scandals that marked Bolsonaro’s first term.

FTX is a leading cryptocurrency derivatives broker but its services and FTT tokens are not available in some jurisdictions, including the United States. The Hong Kong-based company is not a registered provider in Brazil either. Nevertheless, the platform launched a futures contract based on the 2020 U.S. election results last February, and users in other countries were able to trade it.

This year, FTX offered them an option to speculate whether Donald Trump will win the 2024 presidential election. Trump 2024’s mark price is currently $0.085 with a daily volume of just $20. The contract “will settle to $1 if Trump is president on February 1st, 2024, and $0 otherwise… You can go long or short using any of the available forms of collateral,” FTX details on its website.

What are your expectations about the outcome of Brazil’s presidential election? Tell us in the comments section below.