Méliuz, a Brazilian fintech, has allocated 10% of its cash reserves into bitcoin, investing $4.1 million to purchase 45.72 bitcoins. This move marks them as the first publicly traded firm in Brazil to adopt a bitcoin treasury strategy, aiming for long-term returns while facing challenges in its stock valuation.
Méliuz, a Brazilian fintech firm, announced its adoption of a bitcoin treasury strategy by allocating 10% of its cash reserves into bitcoin, making it the first publicly traded company in Brazil to do so. The firm invested $4.1 million to purchase 45.72 bitcoins at an average price of $90,926 per coin, which constitutes approximately 10% of its total cash holdings as per a policy approved by its board of directors.
The allocation aims for “long-term returns” through smart treasury management. Méliuz has also formed a Bitcoin Strategic Committee to explore the expansion of its bitcoin strategy and position it as a primary treasury asset. According to Chairman Israel Salmen, bitcoin serves as an “intelligent alternative” to traditional cash reserves, being seen as a long-term store of value.
With its investment, Méliuz joins the ranks of U.S. firms like MicroStrategy, which holds significant bitcoin assets. The fintech caters to over 30 million users in Brazil, providing cashback and financial services, although its stock has significantly dropped from a valuation of nearly $6 billion in 2021 to around $270 million currently.
Salmen pointed out that the low trading volume of Méliuz shares renders them “irrelevant” in public markets, and he hopes this venture into bitcoin will stimulate renewed interest from investors. The Brazilian crypto market has been thriving, with over $200 billion traded last year. Méliuz anticipates that its bitcoin allocation will yield better long-term returns than Brazil’s current benchmark interest rate of 13.75%.
Overall, Méliuz’s decision to adopt a bitcoin treasury strategy reflects a growing trend among companies seeking alternative ways to enhance their asset portfolios amidst fluctuating market conditions.
Méliuz’s pioneering strategy to incorporate bitcoin into its treasury management marks a significant milestone in Brazilian fintech, potentially influencing other firms to follow suit. The investment aims to achieve long-term returns while addressing current challenges in the company’s stock performance. By forming a dedicated committee to further explore bitcoin utilization, Méliuz is positioning itself at the forefront of the evolving cryptocurrency landscape in Brazil.
Original Source: bitcoinmagazine.com
