Shares from Hong Kong-based app maker Meitu surged after the company had invested $ 40 million in Bitcoin (BTC) and Ethereuem (ETH). It is the first company in this region to make such a move.
Meitu invests in cryptocurrencies
Yesterday, Meitu released an official statement saying that it had invested a total of March 5 “Approximately USD 22.1 million and USD 17.9 million” in ETH and BTC. This gives 15,000 ETH and around 380 BTC.
The company’s CEO, Cai Wensheng, justified the move by saying that it was in line with the company’s business plan that monitors the blockchain market. Meitu is probably aware of the risks and that the new decision could arouse the anger of the Chinese authorities. Middle Kingdom elites are pushing to promote a narrative according to which cryptocurrencies and blockchain are two different topics. In other words, the company’s strategy of investing in both blockchain technology and cryptocurrencies may not be welcomed by Beijing.
CEO Meitu, however, referred to a Chinese proverb about a general who, instead of starving to death, summoned the courage to become the first person to ever eat a scary-looking crab. This is probably a clue that Wensheng believes other companies in the region may soon follow in his company’s footsteps.
These purchases were made in accordance with the cryptocurrency investment plan previously approved by the board of directors […]under which the group can make net purchases of cryptocurrencies worth up to $ 100 million, funded from existing cash reserves
– added in statement.
The company acquired ETH “As a preparation for entering the blockchain market”, while a BTC investment is part of an asset allocation strategy.
China and cryptocurrencies
It is worth adding that China is not a very cryptocurrency-friendly country. It has even been suggested that the timing of the issuance of the digital yuan will be the time Beijing will ban the use of Tether within its borders. Today, stablecoin allows the Chinese to trade on the BTC market.
Meitu, however, could fully emigrate if the Chinese authorities wanted to harm her. As reported media, the company has been incorporated in the Cayman Islands, which in principle may help it avoid a reaction from Chinese regulators to a new investment decision.
The company is mainly known for its beauty and skincare app, BeautyPlus. However, it is also developing facial recognition technology.