A futures contract created by a cryptocurrency brokerage so that traders can bet on the victory or defeat of Jair Bolsonaro (PL-RJ), plummeted after a year of its launch. This indicates, in theory, that investors are afraid of the victory for reelection of the current president of Brazil. The announcement of the creation of this investment mechanism was made by the CEO of FTX himself, Sam Bankman-Fried, through his Twitter in 2021. On the occasion, he provoked investors whether Bolsonaro will win the election or not.
https://t.co/zMZb91mq99 — will Jair Bolsonaro win the 2022 Brazilian presidential election? — SBF (@SBF_FTX) May 15, 2021
Scheduled to take place on October 2 in its first round, the 2022 elections in Brazil will see Brazilians choose President, Governors, Federal and State Deputies and Senators. In the event of a second round, the population will return to the polls on the 30th of the same month, to finally choose the final executive candidates.
Futures contract to bet on victory or defeat of Jair Bolsonaro in the elections plummets in cryptocurrency brokerage after a year
The futures market, even on cryptocurrency exchanges, is a scenario apart from traditional spot trading. That’s because, in this market, the investor buys or sells an asset with an expectation of something that will happen in the future. With the launch of “BOLSONARO2022” by FTX, investors indicate whether or not they support the election of the president, a theoretical move. As this is a futures purchase contract, those who invest in the product expect the current president to be re-elected, in order to win the maximum prize of US$ 1.00. Each contract currently costs US$0.22, which indicates that a re-election of Jair Bolsonaro could bring a big profit to investors. If the president loses, the contract goes to 0 dollars and the entire investment is lost. Since it was launched, still with low volume, the contract has plummeted in price by half, which theoretically would indicate a low confidence in reelection. This July, however, in the first seven days of the month, the contract recorded an increase of 21%, which shows a possible resumption in the confidence of bettors in this futures market in a scenario of Bolsonaro re-elected.
Futures contract to bet on Bolsonaro at brokerage FTX plummets in the last year, but rises again in July 2022. FTX.
US presidential elections
In 2020, the United States chose a new president in its electoral process, after 4 years with President Donald Trump at the helm of the Republican party. To prepare for the event, FTX launched future contracts for several presidential candidates, including Trump and Joe Biden. After the contest at the polls turned out to be more favorable for Biden, those who invested in Biden’s futures contract made a good profit. Already those who invested in Trump’s contract, the value was all lost. Provoking discussions for 2024, when the US will have new elections again, FTX has already created the “TRUMP2024” contract, which allows investors to bet again on the defeat or victory of the former president, who, unlike “Bolsonaro2022”, registers a high of price in the last year.
Futures contract TRUMP2024 created by FTX values since 2021, indicating a confidence in the return of the former US president. FTX.