Meliuz, a Brazilian fintech, has adopted a strategy to invest in Bitcoin, launching a plan to allocate up to 10% of its cash reserves to the cryptocurrency. The announcement caused its shares to rise over 25%. CEO Israel Salmen believes this could strengthen Meliuz’s financial position and position it as a leader in the evolving financial landscape.
Meliuz, a Brazilian fintech, has announced its new strategy to invest part of its cash reserves in Bitcoin, potentially elevating the cryptocurrency as the cornerstone of its treasury. Following this news, the company’s shares, traded in São Paulo, surged over 25%. This approach is aimed at generating long-term returns by drawing inspiration from established entities such as Strategy, a prominent corporate Bitcoin holder, as well as Japan’s Metaplanet.
The firm plans to allocate up to 10% of its cash reserves to Bitcoin investments and has already acquired 45.72 Bitcoin, valued at approximately $4.1 million. Founded in 2011, Meliuz started as a cashback service for online shoppers and has since expanded to include physical retail, digital accounts, and credit products. The company entered the public market in late 2020 but has seen its stock price decline due to Brazil’s elevated interest rates, despite holding over 240 million reais ($41.72 million) in net cash.
Chairman Israel Salmen emphasized the significance of this strategic shift, stating, “Allocating a significant amount of our capital to fixed income investments may seem like a prudent strategy, but in practice we believe it represents a significant opportunity cost.” Salmen added that this new approach could enhance Meliuz’s financial stability while helping position the company as a leader in the ongoing global financial transformation.
The company intends to further analyze the impact of adopting Bitcoin as a primary asset for its treasury. Analysts from UBS BB noted that while this initiative is relatively new in Brazil, it parallels a rising trend worldwide towards alternative assets. They stated, “If successful, the strategy might set Meliuz apart in attracting investors interested in crypto exposure” but also cautioned that it could introduce increased volatility to the firm’s financial results.
In conclusion, Meliuz’s strategic decision to invest in Bitcoin represents a forward-thinking initiative aimed at capturing long-term financial returns. This move aligns with global trends in corporate treasury management and underscores the fintech’s adaptability in a turbulent economic environment. While there are potential risks associated with increased volatility, the company’s substantial cash reserves provide a buffer for this innovative financial strategy.
Original Source: www.usnews.com
