Crypto Betting Market Misses Pope Prediction, 1.2% Probability

In a surprising turn of events, the crypto betting market, which had gained recognition for its accuracy in predicting the outcome of the last US presidential election, failed to anticipate the selection of the new Pope. Cardinal Robert Francis Prevost, who was elected as the first US-born Roman Catholic pontiff, was not among the top contenders on the prediction markets platform Polymarket. Traders on the platform had assigned only a 1.2% probability to his selection for the church’s highest office. Prevost, who previously served as the prefect of the Dicastery for Bishops at the Vatican, chose the name Leo XIV upon his election.

Cardinal Pietro Parolin, the Vatican Secretary of State, was the leading candidate with an implied probability of 28%, while Cardinal Luis Antonio Tagle of the Philippines was seen as the second most likely at 21% as of Wednesday on Polymarket. Prevost, 69, was born in Chicago but spent a significant portion of his career in Peru before moving to Rome under the guidance of the late Pope Francis.

Polymarket allows users to transact in cryptocurrency for wagers placed on the site, enabling them to buy “yes” or “no” shares on the outcomes of closely watched events. The platform gained significant attention during the frenzied betting on the outcome of last year’s US election, which led to substantial trading activity. However, the site faced scrutiny after a trader in France made massive bets on Donald Trump to win the US presidential election, which influenced the predictions market.

This event highlights the limitations of prediction markets, even those based on cryptocurrency, in accurately forecasting outcomes, especially in complex and unpredictable scenarios such as the selection of a new Pope. The discrepancy between the market's predictions and the actual outcome underscores the need for caution when relying on such platforms for high-stakes decisions. The crypto betting market, while innovative, is not infallible and can be influenced by various factors, including large bets by individual traders.