Leading Chinese company, Meitu has announced the purchase of the two leading crypto assets by market cap. According to the announcement, the firm bought 15,000 units of Ethereum and 379.1214267 units of Bitcoin in an open market transaction at an average cost of approximately US$22.1 million and US$17.9 million respectively, on March 5, 2021. Cumulatively, the firm has spent $40 million in its first foray into the crypto market.
Meitu, which has a market cap of $12 billion and is a publicly listed company on Hong Kong Stock Exchange, said it made the purchase from its cash reserve. The firm also went on to disclose that the purchase was made in line with a “cryptocurrency investment plan previously approved by the board of directors.” This investment plan would allow the firm to make purchase of digital assets up to the tune of $100 million and it would be majorly financed through its cash reserve. Thus, this means that the China-based company can still buy crypto of up to $60 million under this investment plan.
Interestingly, in what could be termed as one of the reasons why the firm is investing in crypto, the Meitu board said “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.”