Chinese Publicly Listed Company Buys Bitcoin (BTC) and $17.9M Ether (ETH)
While Meitu’s Bitcoin purchase is part of the company's asset allocation strategy, the company bought Ether in preparation to enter the blockchain industry.
China’s beauty app Meitu Inc. has become the latest corporation to invest in cryptocurrency as the company buys $22.1 million worth of Bitcoin, 379.1 BTC, and $17.9 million worth of Ether, 15,000 ETH in the open market on March 5, revealed in the Sunday evening exchange filing.
The company’s crypto purchase pushed Meitu’s prices as much as 14.4% Monday before succumbing to the wide market selloff.
While the Hong Kong-listed company has bought the crypto assets only now, Meitu’s founder announced in mid-2018 that he personally bought 10k+ BTC. In recent years Cai Wensheng, Meitu’s chairman and a crypto enthusiast, has also been exploring blockchain technology.
Meitu, an app that helps touch up user-profile pictures, is a $10 billion company with 50 million daily active users that launched Hong Kong’s biggest initial public offering in 2016.
It took the crypto route as part of the company's plan to use as much as $100 million of its cash hoard to fund crypto purchases.
The company believes the prices of digital assets have “ample room” to appreciate in value, and they can help diversify its portfolio. It also notes that cash is now “subject to depreciation pressure due to aggressive increases in money supply by central banks globally.”
Wensheng says Bitcoin has several features that potentially even render Bitcoin “as a superior form to other alternative stores of value such as gold, precious stone and real estate.”
While Bitcoin is part of the company's asset allocation strategy, the company purchased Ether in preparation to enter the blockchain industry. The document reads,
“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.”
It further states that the company believes the blockchain industry is “still in its early stage, analogous to the mobile internet industry in circa 2005.”
Meitu is evaluating the feasibility of integrating blockchain technology in its overseas businesses, and given that Ether powers the second largest network, purchasing it was a “logical preparation,” the filing said.