Meliuz, a Brazilian fintech, has initiated a strategy to allocate up to 10% of its cash reserves in Bitcoin, leading to a 25% surge in its stock. The company has already purchased 45.72 bitcoins worth $4.1 million. Meliuz aims for long-term returns while exploring Bitcoin as a primary treasury asset, amidst Brazil’s high interest rates and past stock challenges.
Brazilian fintech Meliuz has introduced a strategy permitting the allocation of a portion of its cash reserves towards Bitcoin, with ambitions to potentially designate the cryptocurrency as the primary asset of its treasury. Following this announcement, Meliuz’s shares registered a notable increase of over 25%. The firm’s objective is to secure long-term returns through Bitcoin investments, drawing inspiration from companies like Strategy and Japan’s Metaplanet.
Meliuz intends to allocate up to 10% of its cash reserves towards Bitcoin, having already acquired 45.72 bitcoins for approximately $4.1 million as per a securities filing. Established in 2011, Meliuz initially focused on cashback payments for online retailers but has since expanded to offer digital banking solutions, including accounts and credit cards. Although the company went public in late 2020, its stock value has decreased in recent years due to Brazil’s elevated interest rates, with net cash exceeding 240 million reais ($41.72 million).
Chairman Israel Salmen expressed that while investing heavily in fixed-income assets appears wise, it actually presents a significant opportunity cost. He stated that this new strategy aims not only to enhance Meliuz’s financial stability but also positions the company as a forerunner in the ongoing global financial transformation. Additionally, Meliuz will perform thorough assessments, including evaluating Bitcoin’s adoption as a core strategic asset.
UBS BB analysts noted that, while Meliuz’s strategy is relatively novel among Brazilian enterprises, it aligns with a broader trend of organizations seeking alternative value stores and investment returns. They cautioned that if successful, this approach could distinguish Meliuz in attracting crypto-investment-seeking investors, albeit with a potential increase in volatility regarding the company’s financial results.
Meliuz’s recent strategic shift towards Bitcoin investment represents a significant innovation within the Brazilian fintech landscape. By allocating part of its treasury reserves to cryptocurrency, Meliuz aims to secure greater long-term returns while positioning itself at the forefront of a global financial evolution. This move, while promising, poses potential risks associated with market volatility, which stakeholders must consider as they evaluate the company’s future trajectory.
Original Source: www.usnews.com
