China: Meitu buys another $50 Million of Bitcoin and ETH
Meitu, a Hong-Kong-listed and Cayman Islands-Incorporated video and image processing software developer, has splashed another $50 million buying both Bitcoin and Ethereum, sources on Mar 17 shows.
Meitu’s $90 million investment in Bitcoin and Ethereum
Best known for its beauty app, Meitu is adding to their crypto stash another $50 million. The public firm appears to be confident of Ethereum’s prospects judging from their allocation, buying 16k ETH coins for $28.4 million. The remainder, $21.6 million, purchased an additional 386.1 BTC.
In total, Meitu now owns 41k ETH and 765.2 BTC, an acquisition made from their cash reserves. Subsequently, it becomes the first firm listed on the Hong Kong bourse and the first in the world to hold ETH as part of its treasury.
The crypto foray is part of the firm’s plan to invest $100 million in an array of cryptocurrencies following approval from the board of directors.
According to Meitu’s co-founder, the initial move was unprecedented. It aimed to capitalize on cryptocurrencies that have more upside potential.
Bitcoin is a Store-of-Value
In their view, Meitu considers Bitcoin as a superior store-of-value, a safe-haven of digital nature better than gold and real-estate in beating inflation.
By holding Bitcoin and ETH, they can diversify on cash reserves—hedging against inflation of which fiat is under significant pressure from central bankers. By mitigating against the effects of the coronavirus pandemic, most central banks, including the FED, are hitting the money printers to support the economy.
However, their intervention could, in the medium term, significantly gnaw the value of the USD. Acquiring Bitcoin—and other potent digital assets like ETH, therefore, could be a move to preserve value and earning capital gains in rapidly appreciating investments.
Trading Crypto is Illegal in China
Meitu’s investment is positive, especially in mainland China where trading cryptocurrencies is illegal. Accordingly, the Xiamen-based software firm highly likely custody their assets in offshore accounts like Hong Kong. Here, laws around crypto vary from mainland China.
Even with bans, the surge of Bitcoin prices to new levels, racing over 3X from 2017 highs, attract Chinese companies’ interest. GAC-NIO said it would accept BTC payment for car purchases before retracting because it didn’t have permission from the government.
Tesla, as BTCManager reports, already owns $1.5 billion of BTC. Besides, it has plans of accepting BTC as payment for any of their products, including the purchase of electric cars.