(Bloomberg) -- Medical device maker Semler Scientific Inc. said it has adopted Bitcoin as its primary treasury reserve asset, becoming one of the few public companies to follow the controversial approach pioneered by MicroStrategy Inc. 

Shares of the San Jose, California-based firm jumped as much 36 per cent to US$31.61, raising its market value to around $220 million. Prior to Tuesday’s rally, the stock had slumped almost 50 per cent so far this year. In a statement, Semler Scientific said it purchased 581 Bitcoin for an aggregate amount of $40 million, inclusive of fees and expenses. 

“Our Bitcoin treasury strategy and purchase of Bitcoin underscore our belief that Bitcoin is a reliable store of value and a compelling investment,” said Eric Semler, chairman of the company, and head of TCS Capital Management. “We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability. We also believe its digital, architectural resilience makes it preferable to gold, which has a market value of approximately 10 times that of Bitcoin.”

MicroStrategy co-founder and Chairman Michael Saylor had the enterprise software maker start buying the volatile cryptocurrency in 2020 as a hedge against inflation. The firm’s Bitcoin holdings have grown to beyond $10 billion, with the company using proceeds from cash flow, equity and debt sales to fund purchases. MicroStrategy shares have surged more than 1,300 per cent since it starting buying Bitcoin. A handful of mostly crypto-related companies such as Block Inc. also hold Bitcoin on their balance sheet. 

Semler Scientific’s board and senior management were looking for potential uses of cash, including acquisitions, before deciding to acquire the digital asset. “After studying various alternatives, we decided that holding Bitcoin would be the best use of our excess cash,” Semler said.

The company had revenue of $15.9 million for the three months ended March 31, according to its most recent corporate filings. The revenue is primarily from fees charged to customers for use of vascular testing products such as the patented and FDA cleared, QuantaFlo, and from sale of accessories used with these products.

Semler Scientific also had cash, cash equivalents and restricted cash of $62.9 million of as March 31. Their cash was held in a variety of non-interest bearing bank accounts and Treasury bills. As of March 31, the firm held approximately $10.5 million of US Treasury bill, $45.5 million in US government money market fund account and the remaining cash of $6.9 million held in non-interest bearing bank accounts. 

The company says it will continue to focus on its core medical products and services, in addition to its Bitcoin purchase strategy. As Semler Scientific continues to generate revenue and free cash flow from sales of its products, it will continue to evaluate its use of excess cash, the company said.