Brazilian Bitcoin Treasury OranjeBTC Buys Back Stock Instead of BTC

The largest in Brazil Bitcoin Treasury OranjeBTC stopped buying BTC and instead bought back its own shares, the company publicly announced on Thursday, just three weeks after going public.

OrangeBTC he said that he will weigh his options going forward. Companies can buy back their stock as a way to increase the value of their stock, taking it out of the market and reducing its supply.

The move comes as Bitcoin price remains 13% below its all-time high of $126,080, set earlier this month, according to crypto data provider CoinGecko. The leading cryptocurrency recently traded for $109,834 after a rocky two weeks.

“The Company will continue to evaluate capital allocation opportunities in a disciplined manner, always prioritize the maximization of Bitcoin per share (BTC / Share) for its shareholders, either through the direct purchase of Bitcoin or the redemption of treasury shares when they trade at a discount to mNAV,” the company said on its website.

OranjeBTC’s move comes as its shares are trading below net asset value, indicating a discount to equity value. There are also some treasury watchers who have raised concerns about the approach as a way to boost the share price of a struggling company if the value of the asset falls, as recently.

OranjeBTC, which has traded on Brazil’s B3 exchange since October 7, holds 3,708 BTC, worth $408.3 million, according to its website.

It is a direct competitor with the fintech company Méliuz, which earlier this year called itself the first Bitcoin treasury company in South America.

Bitcoin treasurers offer exposure to the asset for investors concerned about security and other challenges of maintaining themselves.

The American software company Strategyformerly MicroStrategy, pioneered the strategy in 2020 and now holds 640,808 Bitcoins worth about $70.5 billion based on the current price, according to bitcointreasures.net data. Its stock price has increased more than 1,400% in the last five years.

A number of other companies listed on the Nasdaq in the United States are following the process to try, changing their business models to focus on the accumulation of crypto, buying not only Bitcoin, but other digital currencies such as Ethereum or Solana. They include Japanese hotel operator Metaplanet, which has built the fourth-largest BTC stockpile, and mining company BitMine Immersion and online marketing firm SharpLink Gaming, which have both created massive ETH hoards.

Brazil, Latin America’s largest economy, is the region’s largest digital asset market, and has the most crypto ETFs.

In a Myriad prediction market, 54% of respondents agreed with crypto trader Mando that Bitcoin will hit $120,000 instead of siding with entrepreneur KBM who believes that BTC will fall to $100,000. Myriad is a unit of Dastan, the parent company of Decrypt.