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The list of crypto-owning firms just keeps getting longer. Meitu, a photo beauty app popular in China, has announced that it has invested in Bitcoin (BTC) and Ether (ETH), the top two cryptocurrencies in the world in terms of market cap.
Meitu announced on Sunday, March 7, that it made a $40 million investment in cryptocurrency in a filing to the Hong Kong Stock Exchange, according to Markets Insider. With its purchase, the Chinese app maker joins the ranks of crypto-owning firms such MicroStrategy, Tesla, and Square that have included BTC in their treasuries as a reserve asset.
“The Group has purchased 15,000 units of Ether and 379.1214267 units of Bitcoin (“BTC”), both cryptocurrencies, in open market transactions at an aggregate consideration of approximately US$22.1 million and US$17.9 million respectively, on March 5, 2021,” Meitu wrote. The company used its cash reserves to fund the purchase.
The app maker also hinted that it plans to make more crypto purchases in the future. The $40 million cryptocurrency investment is the first tranche of its plan to acquire up to $100 million worth of digital currencies, according to TechCrunch.
“The Board takes the view that blockchain technology has the potential to disrupt both existing financial and technology industries, similar to the manner in which mobile internet has disrupted the PC internet and many other offline industries,” Meitu said. “The Board believes that the blockchain industry is still in its early stage, analogous to the mobile internet industry in circa 2005.”
Meitu explained that there is potential for crypto to appreciate considering that blockchain is still in its early stages of development. “Against this backdrop, the Board believes cryptocurrencies have ample room for appreciation in value and by allocating part of its treasury in cryptocurrencies can also serve as a diversification to holding cash (which is subject to depreciation pressure due to aggressive increases in money supply by central banks globally) in treasury management,” the company added.
Meitu is investing in Bitcoin as part of its asset allocation strategy as a hedge against the depreciation of fiat currencies due to the increase in the money supply worldwide. Meanwhile, its Ether purchase is part of its preparation as it enters the blockchain industry. The company revealed that is studying the possibility of integrating the technology into its various overseas businesses.
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