Bitcoin

Plunge

when

<p>The surprise victory of Luiz Inácio Lula da Silva caused a crash in the Brazilian stock market and currency. At the same time, bitcoin rose when expressed in reals, illustrating the difference between the global performance of an asset and its value in a weakened local currency.</p>
<div class="in-brief">
 <div class="in-brief--container"><span></span><span></span>
  <h2 class="in-brief--title" id="in-brief">In Brief</h2>
  <ul>
   <li>The surprise victory of Lula causes a sharp drop in the Brazilian stock market and the real against the dollar.</li>
   <li>Ibovespa loses up to 17% during the session, while the real falls 8.1% against the dollar.</li>
   <li>Bitcoin rises 3 to 8% in reals despite a drop in its dollar price.</li>
   <li>This rise is mainly explained by the depreciation of the Brazilian currency, and not by strong demand for Bitcoin.</li>
  </ul>
 </div>
</div>
<h2 id="the-fall-of-the-real-changes-the-market-reading">The fall of the real changes the market reading</h2>
<p>Lula won the second round of the presidential election with 51.79% of valid votes, against 48.21% for Flávio Bolsonaro. The result caught investors off guard, while <a href="https://www.cointribune.com/en/crypto-prediction-markets-hit-2-7b-weekly-record/" rel="noopener noreferrer nofollow">predictive markets</a> assigned about 80% victory chances to the right-wing candidate.</p>
<div class="my-4">
 <div class="ads "></div>
</div>
<div class="affiliate-button"><a href="https://okx.com/join/COINTRIBUNE" rel="noopener noreferrer nofollow">Start your crypto adventure safely with OKX</a><a href="https://www.cointribune.com/en/sponsored-content/" rel="noopener noreferrer nofollow">This link uses an affiliate program.</a>
</div>
<p>The reaction immediately affected stocks, bonds, and currency. Investors had built favorable positions on Brazil since the first round, anticipating more restrictive fiscal policy under Bolsonaro.</p>
<p>The main movements observed on October 26 show the scale of the shock :</p>
<ul>
 <li>Ibovespa lost up to 17% during the session ;</li>
 <li>Trading was suspended for 30 minutes in São Paulo ;</li>
 <li>The real fell 8.1% against the dollar at the close ;</li>
 <li>The American ETF EWZ dropped up to 26% ;</li>
 <li>Bitcoin rose in reals despite falling in dollars.</li>
</ul>
<p>The gap between Ibovespa and the EWZ ETF is particularly revealing. The first measures stock performance in the Brazilian currency. The second is listed in New York in dollars and thus simultaneously suffers from the drop of Brazilian companies and the depreciation of the real.</p>
<p>At the session low, the combination of both movements <a href="https://decrypt.co/381828/brazil-stock-market-crashes-lula-upset-victory" rel="noopener noreferrer nofollow">caused a loss close to 26%</a> for the dollar-based investor. The same stock can thus show a smaller decrease in a Brazilian’s portfolio and a much stronger drop in a foreign investor’s portfolio.</p>
<h2 id="bitcoin-rises-in-brazilian-currency">Bitcoin rises in Brazilian currency</h2>
<p>Bitcoin traded around 80,000 dollars during the correction in the Brazilian markets, with a drop of about 1.8% over 24 hours. Its behavior thus appeared negative when observed from the United States.</p>
<p>The situation was different in reals. According to platforms and the time chosen to establish the daily rate, BTC gained about 3% to 8% in Brazilian currency on October 26. CoinMarketCap <a href="https://coinmarketcap.com/currencies/bitcoin/btc/brl/" rel="noopener noreferrer">evaluates</a> its rise from approximately 397,900 to 429,960 reals between October 25 and 26, a rise slightly above 8%.</p>
<p>This rise does not necessarily mean that Brazilians massively bought bitcoin after the election. It mainly comes from currency conversion. The local BTC price results from two variables: its price in dollars and the value of the dollar relative to the real.</p>
<p>When bitcoin loses nearly 2% in dollars, but the Brazilian currency falls more than 8%, the exchange effect can more than offset the BTC correction. The Brazilian holder then sees the nominal value of their bitcoins increase, even if the asset depreciates on the global market.</p>
<div class="my-4">
 <div class="ads "></div>
</div>
<p>The phenomenon also concerns gold, dollar-backed stablecoins, and other international assets. It mainly shows that a return cannot be interpreted without specifying the currency in which it is calculated.</p>
<h2 id="h-monetary-protection-but-not-a-guaranteed-safe-haven">Monetary protection, but not a guaranteed safe haven</h2>
<p>The episode may strengthen Bitcoin’s image as protection against national currency depreciation. For a saver exposed only to the real, holding an internationally listed asset indeed limited the exchange shock in the very short term.</p>
<p>However, this protection remains imperfect. Bitcoin remains volatile and can fall faster than the local currency. A 15% drop of BTC in dollars would not be offset by an 8% depreciation of the real. Its local rise on October 26 is therefore not enough to prove its status as a safe haven.</p>
<p>The next test will mainly come from economic policy. Investors await the appointment of the Finance Minister and a program capable of stabilizing the debt. Graham Stock, of RBC BlueBay Asset Management, <a href="https://www.reuters.com/business/finance/investors-expect-markets-unwind-brazils-lula-reelected-2026-10-26/" rel="noopener noreferrer nofollow">estimates</a>:</p>
<blockquote class="wp-block-quote">
 <p>The main signal for the markets will be the next Lula administration’s commitment to fiscal discipline.</p>
</blockquote>
<p>If the real stabilizes, the Brazilian price of bitcoin will again depend more on its global trend. On the other hand, renewed distrust towards public finances could maintain a significant gap between BTC in dollars and its value in reals.</p>
<p>Lula’s victory thus does not automatically turn bitcoin into a political refuge. Rather, it reminds that in times of currency crisis, the currency used can profoundly change the perception of <a href="https://www.cointribune.com/en/bitcoins-80k-support-faces-3-major-market-tests/" rel="noopener noreferrer nofollow">an asset’s performance</a>.</p>

Brazil Stocks Plunge 17% After Lula’s Surprise Win

Table of Contents

Cointribune EN

Other articles published on Oct 27, 2026

Join our free newsletter for daily crypto updates!