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Big Chinese firm stocks up on cryptocurrencies

Siglinde, · Kategorien: Bitcoin

Ethereum bought for $22 million: Big Chinese firm stocks up on cryptocurrencies

A Chinese public company has bought Ethereum for $22 million and invested $17 million in Bitcoin. It is the first public company to add Ethereum to its treasury books.
The purchase of Bitcoin… and Ethereum

You may not have heard of Meitu, but the Chinese photo app is making quite a few waves in the online Ethereum community.

The Chinese photo editing app is listed on the Hong Kong stock exchange and popular Bitcoin Rush scam in mainland China with millennials looking to beautify their pictures. And on 5 March 2021, the company announced that it holds the world’s largest cryptocurrency, worth over $40 million.

„The Group purchased 15,000 units of Ether and 379.1214267 units of Bitcoin („BTC“), both cryptocurrencies, in open market transactions on 5 March 2021 for a total consideration of approximately $22.1 million and $17.9 million respectively,“ the company said.

The purchases were made under a „cryptocurrency investment plan“ previously approved by the company’s board of directors, under which Meitu can make a net purchase of various cryptocurrencies worth up to US$100 million, it said. The money for the purchases will come entirely from existing cash reserves and „other remaining proceeds“ from the 2016 IPO.

Hong Kong Listed Company Meitu announced that the Company has bought 380 BTC ($17.9mil) and 15,000 ETH ($22.1mil) from open market on March 5, 2021.

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According to official figures, Meitu made an annual profit of more than $107 million last year, mainly from the sale of advertising space on its app. The company has no other significant sources of profit, but crypto buying could be a means to that end.

Meitu expects cryptocurrencies to increase in value in the future. They further explained their move to move away from holding cash as an asset:

„The Board believes that cryptocurrencies have ample scope for appreciation and by allocating part of its assets to cryptocurrencies, can also serve as diversification to holding cash.“

Cash printing led to the move

According to Meitu, cash has been exposed to a decline in value due to the aggressive increase in money supply by central banks around the world in their treasury management. This was a reference to the rampant and incessant money printing by central governments last year – a move that market watchers believe will lead to inflation and a drastic impact on the overall economy.

Meanwhile, the move comes amid several companies and investors around the world turning to cryptocurrencies to protect themselves from the gloomy economic outlook and fears of hyperinflation in the coming years.

And while most companies have stuck with Bitcoin, the purchase of Meitu shows that firms may now also be buying Ethereum.