Brazil stablecoin trading surges following Lula election victory

Following the October 25 presidential runoff in which Luiz Inácio Lula da Silva defeated Flávio Bolsonaro, Brazilian companies have turned heavily to dollar-backed stablecoins to hedge against currency volatility. On Mercado Bitcoin, corporate accounts accounted for 78% of trading volume on the Sunday following the election.

Trading activity saw massive increases, with USDT turnover rising nearly 800% and Bitcoin volume climbing 865% on the exchange. Across monitored platforms, USDT and USDC trading against the real rose 150% and 318%, respectively. Companies utilized these digital assets to manage exposure to the Brazilian real while traditional financial markets were closed.

The election outcome triggered significant market shifts. Brazil’s Ibovespa index plunged 14%, marking its worst session since March 2020, while the US dollar gained over 8% against the real, its strongest daily rise since 1999. The surge in crypto activity reflects corporate efforts to protect cash holdings from exchange-rate uncertainty following a result that contrasted with market expectations.