- Meitu, a Chinese company that owns a hugely popular beautifying app, has bought tens of millions of dollars worth of cryptocurrency
- Meitu announced yesterday that it had bought BTC and ETH as a hedge in a “diversification” measure
- It is the first listed Chinese company to confirm a purchase of cryptocurrency
Meitu has become the first listed Chinese company to openly announce a purchase of cryptocurrencies. Meitu, which operates one of the country’s most popular photo editing apps, bought $22.1 million worth of ETH and $17.9 million worth of BTC last week, stating it was seeking “diversification to holding cash”. It also said that it was looking into blockchain-based apps on the back of the company’s interest in the space.
Crypto Provides “Diversification” From Cash
Meitu revealed the news yesterday, following in the footsteps of the likes of Tesla and Square in buying up cryptocurrencies as an alternative form of investment. However, their purchase is interesting for two reasons – firstly the fact they bought an almost equal amount of ETH as BTC and secondly because of China’s notoriously fractious relationship with cryptocurrencies.
In a statement, Meitu said that the board of directors believe that “allocating part of its treasury in cryptocurrencies can…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 Swimming Upstream
As a result of the purchase, the Hong Kong stock exchange-listed company becomes the first such entity to use cryptocurrencies for such a purpose. The move will likely raise eyebrows in Chinese power circles as the government has been engaging in a crackdown of cryptocurrency trading facilities in advance of the rollout of its digital yuan currency.
However, there is nothing illegal about buying cryptocurrencies in China as there once was, and Meitu may turn out to start a trend among companies with younger boardrooms, as long as nothing negative comes from it.
