Brazilian companies moved into crypto on election day to protect their treasuries, and corporate accounts generated 78% of trading on Mercado Bitcoin. The Ibovespa then fell 14% as incumbent Luiz Inácio Lula da Silva beat Flávio Bolsonaro.
Brazilian companies rushed into crypto trading on Sunday to protect their treasuries from the election outcome. Incumbent President Luiz Inácio Lula da Silva, known as Lula, unexpectedly beat Flávio Bolsonaro.
Corporate accounts drive Mercado Bitcoin volume
On crypto exchange Mercado Bitcoin, corporate accounts generated 78% of trading. Turnover in Tether's dollar-pegged stablecoin, USDT, jumped nearly 800% from the week before, and bitcoin trading surged 865% compared with the previous Sunday, the exchange said.
The exchange said retail customers accounted for just 22% of volume. Pedro Fontes, a research analyst at Mercado Bitcoin, said stablecoins such as USDT and USDC are a simple way to dollarize part of an investor's assets.
The activity reached beyond one venue. Data from Biscoint, which tracks crypto prices and volume across 10 venues including Binance and MB, shows USDT turnover against the real rose 150% from the previous Sunday, while USDC volume jumped 318%.
Bitcoin gains against the real as global volume falls
The surge continued on Monday. Combined USDT and USDC turnover reached 1.84 billion reais ($350 million), 65% higher than in the previous week.
On Binance, bitcoin turnover against the real rose 370% while the global BTC/USDT pair recorded a 25% decline. Bitcoin gained 9.4% against the real and slipped 0.2% against USDT, a move consistent with a repricing of Brazil's currency.
Markets react to Lula's win
The corporate concerns materialized the next day. The benchmark Ibovespa crashed 14% in its worst performance since March 2020, and the dollar jumped more than 8% against the real.
The reaction differed three weeks earlier, when Bolsonaro finished ahead in the first round. The Ibovespa then jumped 7.7% and the dollar weakened more than 4% against the real.
Prediction markets also missed the result. In an Oct. 24 preview, Kalshi put Bolsonaro's chances at 84%, and Lula won the runoff the next day.
Source: CoinDesk
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