Meitu also noted that its purchase of the two digital currencies is the first step in the long-term plan to integrate blockchain technology into its key business operations.
Hong Kong-listed Chinese technology company Meitu Inc (HKG: 1357) has waded into the world of cryptocurrencies with investments in Bitcoin (BTC) and Ethereum (ETH). According to the official filing, the firm revealed it bought as much as 15,000 units of Ether and 379.1214267 units of Bitcoin at valuations of approximately US$22.1M and US$17.9 million respectively.
According to Meitu, the purchase of the digital assets, a move that has been applauded by the market experts, was with the full backing of its board and marks the beginning of further proposed investments which could sum up to $100 million in the future.
“These purchases were made pursuant to a cryptocurrency investment plan previously approved by the board of directors of the Company under which the Group may make a net purchase of up to US$100 million worth of cryptocurrencies, financed by its existing cash reserves other than any remaining proceeds from the Company’s initial public offering,” the firm said in the announcement.
Investments in digital currencies particularly Bitcoin are becoming commonplace amongst global firms but the Chinese tech company, Meitu significantly makes history as the first publicly listed outfit to throw its weight on Ethereum, the world’s second-largest cryptocurrency.
The purchases of the digital coins were made with the understanding that this asset class is “still highly volatile” in relation to price fluctuations in the open market.
Chinese Tech Company Meitu Joins Its US Counterparts in Holding Crypto
The embrace of the inherent prospects of Bitcoin and Ethereum by the Chinese tech company Meitu may be rightly said to have taken precedence from its US counterparts. Coinspeaker.com has published a great number of reports of how business intelligence and software firm, MicroStrategy Incorporated (NASDAQ: MSTR), and electric automaker, Tesla Inc (NASDAQ: TSLA) amongst others have invested at least $1 billion in Bitcoin as a store of value compared to the traditional fiat currency.
There is a common denominator with these firms, and that is the lack of confidence in the Central Bank-backed currency based on inflationary monetary policies they churn out. On the part of Meitu, it believes the investment is a viable strategy to diversify its portfolio to holding cash.
“The Board believes that the blockchain industry is still in its early stage, analogous to the mobile internet industry in circa 2005. 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 firm noted.
Meitu Inc plans to hold its Bitcoin and Ethereum reserves for a long time.
Embrace of Blockchain Technology
Meitu also noted that its purchase of the two digital currencies is the first step in the long-term plan to integrate blockchain technology into its key business operations.
The firm plans to create dApps built on the Ethereum blockchain “as well as identifying suitable overseas blockchain-based projects for potential investments,” all to bring additional value to its global user base.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
