In the past, they thought that Loki had the highest chance of winning, but now they thought that it was impossible for Loki not to be the final winner of the competition, and were even willing to bet on it. This was how confident they were in Loki's power.
Their confidence in him didn't come because he was able to fight Simon to the extent that Simon ran for his dear life. No one thought that he did that.
They were just confident in him because he was now a rank 2 cultivator, and it was common sense for rank 2 cultivators to bully rank 1 cultivators.
They didn't know what he was capable of, yet they were confident in his victory. So there was no way that Loki, who knew what he was capable of and who knew that he could win the competition at rank 1, couldn't be confident in his victory.
