Brazilian fintech company Meliuz announced on Thursday that it has implemented a new strategy to invest part of its cash reserves in bitcoin, potentially making the cryptocurrency its main treasury asset. This move led to a more than 25% increase in the company's shares traded in Sao Paulo.
Meliuz aims to achieve "long-term returns" through bitcoin investments, drawing inspiration from established firms like U.S.-based Strategy, a major corporate holder of the cryptocurrency, and Japan's Metaplanet.
According to a securities filing, Meliuz can now allocate up to 10% of its cash in bitcoin, having already purchased 45.72 bitcoin valued at about $4.1 million.
Established in 2011 with cashback services at online stores, Meliuz expanded into physical retail, app usage, and now provides digital accounts and credit cards. Although its stock performance suffered due to Brazil's high interest rates, the firm currently holds over 240 million reais ($41.72 million) in net cash.
Chairman Israel Salmen stated, "Allocating a significant amount of our capital to fixed income investments may seem prudent, but we believe it represents a significant opportunity cost." He emphasized that this new strategy would fortify the company's financial position and potentially position them as leaders in a global financial transformation.
Meliuz plans to further analyze "the adoption of bitcoin as the main strategic asset of our treasury."
UBS BB analysts noted that while Meliuz's strategy is relatively new among Brazilian companies, it aligns with a worldwide trend of seeking alternative stores of value and potential returns. They remarked that the success of this strategy could differentiate Meliuz in attracting investors looking for exposure to cryptocurrencies, but it could also introduce more volatility to the company's financial results.