UPDATE: Méliuz acquires 10% of cash in bitcoin; considers expanding stake – Brazil Journal

The recent announcement by Méliuz reveals their acquisition of 10% of their cash holdings in bitcoin, marking the initial phase of a strategy aimed at emulating the success of MicroStrategy in the United States.
The cashback company invested $4.1 million in the cryptocurrency, purchasing 45.72 bitcoins at an average price of $90,296. This move positions Méliuz as the first Brazilian listed company to hold such a substantial investment in bitcoin.
A newly established “bitcoin strategic committee” within Méliuz will evaluate the feasibility of expanding this strategy, with an anticipated preliminary study to be released to the market within the next 45 to 60 days. This committee will also oversee bitcoin purchases operationally and formulate specific guidelines and governance for this domain.
Israel Salmen, Méliuz’s chairman and largest shareholder, expressed that the decision stemmed from the belief that bitcoin serves as a more intelligent alternative for their cash allocation.
“We view bitcoin as a long-term store of value. We have no intention of selling the bitcoins we purchased. We are not traders. Our goal is to build long-term value,” he stated. Acknowledging the potential risks associated with increasing the allocated portion of cash holdings, Israel emphasized Méliuz’s willingness to embrace risk since its founding in 2011, highlighting the strategy as a means to reduce dependence on the real and instead invest in bitcoin, which yielded a 77% annual return in USD over the past decade.
Inspired by MicroStrategy’s successful venture into bitcoin with significant growth in market capitalization, the strategic move by Méliuz reflects a response to the current obscurity surrounding the company’s stock performance on the stock exchange. Once valued at nearly R$6 billion, Méliuz now totals a market value of R$270 million, with minimal analyst coverage and diminishing market activity.
In a letter to shareholders explaining the rationale behind the decision, Israel expressed regret over the diminishing market presence and resultant lack of investor interest, emphasizing the detrimental impact of allocating capital predominantly to fixed income securities.
Posing a fundamental question on the perception of risk, Israel challenged conventional notions by contrasting holding cash reserves vulnerable to devaluation from monetary policies against investing in a genuinely scarce asset like bitcoin, which demonstrated a 77% annual appreciation in USD over the past decade and currently holds a market value of approximately $1.5 trillion.
The strategic move by Méliuz to diversify a portion of its cash reserves into bitcoin reflects a calculated approach to long-term value creation, following the successful precedents set by ventures like MicroStrategy and Tesla in leveraging cryptocurrency assets for capital appreciation and wealth preservation.