China-based photo editing software maker Meitu Inc. is the latest corporation to allocate part of its cash reserve to cryptocurrency investments. The company disclosed that it has bought 380 BTC and 15,000 ETH. As per the Bloomberg report, on Sunday, March 7, Meitu announced a $40 million investment in total.
Meitu has a market cap of $11.76 billion. Chinese firms now seem to be following American corporates so that they don’t miss out on the Bitcoin (BTC) train.
Reportedly, this investment is the company’s plan to put $100 million cash reserves in cryptocurrencies as part of portfolio diversification. Meitu chairman Cai Wensheng has been a long-term crypto enthusiast and has been exploring blockchain technology for some period.
American corporations have been eager to put their balance on Bitcoin amid fears of rising inflation and USD currency devaluation. Top ten companies like Tesla have already announced a $1.5 billion exposure to Bitcoin.
Now, with Meitu joining, it can create a domino effect with other Asian and Chinese corporates joining soon. Meitu’s board of directors is positive that both these assets will outperform in the long term.“Notwithstanding the long-term prospects, cryptocurrency prices, in general, are still highly volatile and therefore the board currently decided to invest in the two largest cryptocurrencies by market capitalization, Ethereum, and Bitcoin, which the Board believes should enhance shareholder value in the long-term”.
The Official Announcement Reads:
“The group is currently evaluating the feasibility of integrating blockchain technologies to its various overseas business, including but not limited to launching Ethereum-based dApps, as well as identifying suitable overseas blockchain-based projects for potential investments.” said Meitu and hence “purchasing Ether is, therefore, a logical preparation for both initiatives.”
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As of June 2020, Meitu held 2.5 billion yuan ($384 million) in cash and liquid financial reserves. Its chairman and founder Cai Wensheng is also a known pro-bitcoin figure. He said in 2018 in an interview that he personally collected 10,000 BTC at the time.
Meitu is also one of the first publicly listed Chinese companies that have joined the ranks of Square, Tesla, and MicroStrategy in holding bitcoin as part of its treasury management strategy.
