Brazilian Firms Pivot to Stablecoins After Lula Election Victory

The shift toward dollar-backed assets was immediate and widespread. On Mercado Bitcoin, USDT turnover skyrocketed nearly 800% compared to the previous Sunday, while Bitcoin volume jumped 865%. Because traditional foreign-exchange markets were closed during the election weekend, companies utilized crypto platforms to secure dollar-denominated holdings before the market reopened to a steep selloff on Monday.

Data from market tracker Biscoint confirmed that the trend extended across the broader ecosystem. Trading for USDT and USDC against the Brazilian real climbed 150% and 318% respectively across ten monitored exchanges. By Monday, the combined turnover for these stablecoins hit 1.84 billion reais, roughly $350 million. Pedro Fontes, a research analyst at Mercado Bitcoin, noted that the election results reinforced the necessity for investors to diversify beyond the local currency, particularly when conventional financial channels remain inaccessible.

This volatility reversed the market optimism seen earlier in October, when investors had anticipated a Bolsonaro victory. Prediction markets like Kalshi had previously assigned an 84% probability of success to the incumbent, creating a sharp disconnect between market expectations and the final ballot count. As firms adjust to the new political landscape, exchange operators are simultaneously navigating a tightening regulatory environment, with a looming October 30 deadline to apply for authorization with the Central Bank of Brazil.