Brazilian Bitcoin Treasury OranjeBTC Buys Back Stock Instead of BTC

Brazil’s biggest Bitcoin treasury OranjeBTC has halted purchasing BTC and instead has bought back its own shares, the publicly traded company announced Thursday, just three weeks after going public. 

OranjeBTC said that it would weigh its options going forward. Companies may buy back their shares as a way to increase the value of their stock by taking it off the market and reducing its supply.

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

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

OranjeBTC’s move came as its shares were trading below net asset value, which would indicate a discount to equity value. It also comes as some treasury observers have raised concerns about the approach as a way to boost a struggling firm’s stock price if the asset’s value tumbles, as it has recently. 

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

It is a direct competitor with fintech company Méliuz, which earlier this year dubbed itself the South American’s first Bitcoin treasury company.

Bitcoin treasuries offer exposure to the asset for investors concerned about the security and other challenges of holding it themselves.  

American software firm Strategy, formerly MicroStrategy, pioneered the strategy in 2020 and now holds 640,808 Bitcoins worth about $70.5 billion based on the current price, according to bitcointreasuries.net data. Its stock price has shot up more than 1,400% over the past five years. 

A number of other Nasdaq-listed companies in the U.S. are following suit to try, changing their business models to focus on crypto accumulation, buying not only Bitcoin but other digital coins like 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 treasuries. 

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

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