Meitu, the Chinese company known for its beauty-focused photo editing app, has purchased $40 million worth of cryptocurrencies. The company publicly listed on the Hong Kong Stock Exchange announced on Sunday that it has bought $22.1 million worth of ether and $17.9 million worth of bitcoin.
Meitu’s Share Value Surges
Following the news of the company purchasing such an amount of crypto, the share value of Meitu surged as much as 14.4% in the early hours of Monday morning.
In a statement released, Meitu said it was buying the cryptocurrencies for investment purposes. It also said the purchase was partly for investment and partly as preparation to enter the blockchain industry, and that it would finance it from its existing cash reserves.
The app maker revealed that it is evaluating the possibility of integrating blockchain technologies into its businesses based abroad, which could include projects on the Ethereum blockchain network.
“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,” Meitu explained in the statement.
For Meitu, the maker of one of the most popular mobile apps in China with nearly 300 million active users, this move demonstrates to investors that the company is ready and determined to embrace technological evolution especially when it comes to the blockchain industry.
This comes as no surprise as the company’s chairman and founder Cai Wensheng is also a known pro-bitcoin figure who has once said that he amassed 10,000 BTC in 2018.
Meitu Joins League of Global Firms Buying Crypto
The Chinese company becomes the latest firm to buy and hold cryptocurrencies as part of its treasury operations. Recall that last month, Tesla Inc disclosed that it had bought $1.5 billion of Bitcoin, which sent the token’s price up 20%.
Square also announced last month in its fiscal fourth-quarter financial report that it bought $170 million worth of bitcoin. The company said it purchased approximately 3,318 bitcoins, expanding on its October 2020 buy of 4,709, and that represents about 5% of the company’s total assets as of the end of 2020.
Microstrategy is another popular company that has been steadily amassing bitcoin as part of its treasury management strategy. The company owns close to 90,531 bitcoin, which was acquired at an aggregate purchase price of about $2.17bn and an average purchase price of around $23,985 per bitcoin.
Other companies buying and holding cryptocurrencies include Galaxy Digital Holdings, Grayscale, Coinshares Group, among others.