Brazilian companies turned to dollar-backed stablecoins in large numbers after Luiz Inacio Lula da Silva defeated Flavio Bolsonaro in the presidential runoff on 25 October.
Corporate accounts generated 78% of Mercado Bitcoin’s trading volume that day, as businesses sought protection from uncertainty surrounding the Brazilian real. Retail customers accounted for the remaining 22%.
Trading in Tether’s USDT on the exchange rose almost 800% compared with the previous Sunday, while Bitcoin turnover increased by 865%. The platform said companies used the market to manage currency exposure while traditional financial markets were closed, before a sharp sell-off when trading resumed on Monday.
Brazil’s Ibovespa index fell 14% on 26 October, its biggest one-day decline since March 2020. The dollar rose by more than 8% against the real, its strongest daily increase since 1999.
Mercado Bitcoin said USDT activity was more than three times the average recorded on the previous four Sundays. It did not disclose the absolute value of the trades.
The exchange attributed the rise mainly to businesses seeking to protect cash holdings from exchange-rate movements. Pedro Fontes, a research analyst at Mercado Bitcoin, said the election highlighted the value of diversifying away from the local currency.
He said stablecoins including USDT and USD Coin (USDC) enabled investors to hold dollar-denominated assets while conventional foreign-exchange markets were unavailable.
However, the figures cover buying and selling activity and do not show how much companies ultimately kept in stablecoins. Higher turnover alone cannot establish the direction or scale of capital flows.
Trading rises across Brazilian exchanges
Data from market tracker Biscoint showed that activity extended beyond Mercado Bitcoin. Across 10 monitored exchanges, USDT trading against the real rose 150% from the previous Sunday, while USDC turnover increased by 318%.
By Monday, combined USDT and USDC turnover had reached 1.84 billion reais, about $350m and 65% higher than the comparable figure a week earlier. Bitcoin trading exceeded 1,336 BTC, more than nine times the previous Monday’s total.
Binance recorded a similar shift in local-currency markets. Its BTC/BRL turnover rose 370%, although BTC/USDT activity fell 25%. Bitcoin gained 9.4% against the real but slipped 0.2% against USDT.
The difference reflected the real’s depreciation, which raised the local-currency value of dollar-linked crypto assets without requiring a comparable increase in their dollar price. Trading totals should not be treated as net capital inflows because every completed transaction has both a buyer and a seller.
The market reaction reversed the move seen after the first-round vote earlier in October. When Bolsonaro finished ahead of Lula, the Ibovespa rose 7.7% and the real strengthened by more than 4% against the dollar, amid expectations of tighter public-spending controls.
Before the runoff, investors considered Lula’s plans for higher social spending alongside concerns about borrowing and limited scope to increase revenue. Kalshi gave Bolsonaro an 84% chance of victory on 24 October, while acknowledging that conventional polls indicated a close contest. Brazil had restricted access to Kalshi and Polymarket in April.
The election took place as Brazil introduced tighter rules for crypto businesses, covering licensing, transaction reporting and stablecoin activity. The International Monetary Fund had raised concerns about stablecoin flows through the financial system, particularly cross-border transactions.
Crypto trading remained legal domestically, although some regulated foreign-exchange settlement channels cannot use virtual assets. Exchanges must apply to the Central Bank of Brazil by 30 October. Binance has applied through its Brazilian entity, BBrasil; firms that do not begin the authorisation process must wind down under the new framework.
