Meliuz Unveils Options-Based Bitcoin Strategy to Enlarge Treasury

Meliuz recently unveiled a new strategy that will allow it to increase the yield gained on the bitcoin held as part of its treasury. The Brazilian company will now leverage options with pre-defined strike prices to keep acquiring bitcoin and profiting from market volatility.

Meliuz to Leverage Cash-Backed Bitcoin Options to Expand Its Treasury

Meliuz, a pioneer in establishing a bitcoin strategic reserve in Latam, has unveiled a new strategy to keep acquiring bitcoin with a low-risk approach. The company will implement a new, options-based strategy that will leverage these derivatives and bitcoin’s volatility to enlarge its over 600 bitcoin stash.

According to local media, Meliuz will start selling put options with specific strike prices. For example, if Meliuz sells options contracts with $95,000 as the strike price and bitcoin goes over that number, the company retains the premium after the contract is executed.

In opposition, if the bitcoin dives under the strike price, Meliuz will have to purchase more BTC at that strike price. Nonetheless, as the objective is to accumulate more bitcoin, the company estimates there would not be a strategic loss associated with the operation.

Meliz explains:

In this event, the company will use the cash already reserved to acquire bitcoin at potentially more attractive prices – a strategy aligned with its long-term bitcoin accumulation policy.

These options will be backed by less than 10% of its operational cash reserve to avoid potential risks. Meliuz claims this novel options strategy is also backed by “specialized partners” in such operations, but did not disclose the names of these institutions.

The company believes this new strategy will help it reach its objective easily, and the results of these operations will be disclosed each quarter in the company’s financial statements.

Meliuz, which is primarily a cashback company, is also exploring other avenues to continue to obtain revenue using bitcoin. Diego Kolling, head of Bitcoin Strategy at Meliuz, has hinted at the new direction of the company, recently commenting that companies assigning their bitcoin to the Lightning Network could earn up to 25% per year.

Read more: Latam Bitcoin Pioneer Meliuz Expands Into US Markets

Read more: Meliuz Becomes the Largest Bitcoin Treasury Company in Latam With Latest Purchase