MercadoLibre, the Amazon of Latin America bought $ 7,8 million in Bitcoin

MercadoLibre, the Amazon of Latin America bought $ 7,8 million in Bitcoin - unnamedThe Argentine e-commerce platform MercadoLibre, which has been labeled the Amazon of Latin America, has entered the Bitcoin market. The company, which has several branches in the United States, revealed that it bought Bitcoin worth nearly $ 8 million.

MercadoLibre buys Bitcoin to safeguard the company's Treasury

According to the highlights drawn up in the company's first quarter 2021 financial report, it was important to take calculated steps in the Bitcoin market, in order to better guarantee its treasury balance, as other US companies have done during this year. year. Excerpts from the company's financial report read: "As part of our treasury strategy, this quarter we purchased $ 7,8 million in Bitcoin, a digital asset that we are revealing within our indefinite-life intangible assets."

Buying Bitcoins in such large quantities, it may seem like a huge asset bet to critics, but when we look at the company's losses, it's clear why MercadoLibre is risking it all on Bitcoin. Unfortunately, the net losses skyrocketed as the company's stock fell.

“Net profit before tax was $ 9,5 million, up from a loss of $ 16,7 million during the first quarter of 2020. The net loss was $ 34 million, with a net loss per share of $ 0,68 ”. - MercadoLibre.

Foreign losses were also massive as the USD buying process became more difficult with the country's new policies.

"We had foreign exchange losses of $ 15,1 million, mainly attributable to the additional cost of valuing the US dollar through an indirect mechanism in Argentina, due to the restrictions imposed by the Argentine government on purchasing US dollars at the rate of official exchange ". - MercadoLibre.

MercadoLibre remains bullish on Bitcoin as a long-term asset

Clearly, the problem of valuing an asset is not what cryptocurrency users face. Since there is no centralized organization governing the market, institutions and investors can buy assets instantly, at their convenience. This could be one of the reasons why the company is considering an alternative asset like Bitcoin.

The new development comes not long after the e-commerce and payment platform enabled a new feature that allows its users to make real estate purchases using Bitcoin. 

Juan Manuel Carretero, Commercial Director for Vehicles and Real Estate at MercadoLibre later released a bullish statement acknowledging the multiple benefits Bitcoin has brought for real estate operations, buyers and sellers.

In a nutshell, this is yet another large company entering this sector. The institutional push therefore becomes increasingly important and this will ensure that Bitcoin can no longer return to the levels of 2020. One wonders, however, when it will resume its run towards the $ 100 expected by many bulls.