The Chinese technology company Meitu purchased millions of dollars of Bitcoin (BTC) and Ether (ETH) from its corporate reserves. Interestingly they allocated more money towards Ether ($25.75M) than Bitcoin ($19M). Meitu is the first major company to do so.
The Chinese company recently announced a purchase of 15'000 Ether (ETH) and more than 379 Bitcoin (BTC). This is part of a new investment plan using cash reserves. Meitu’s business focus is in image and video processing as well as social media. They are currently publicly listed in Hong Kong.
Moving into Blockchain
In the announcement, the company states that its Board sees blockchain as being in a state “analogous to the mobile internet industry circa 2005.” Moreover, Meitu sees its purchases in differing lights.
They see the Ethereum chain as a natural place for its own exploration into blockchain. The company might use it for investing into other blockchain-based projects that take ETH.
Meitu made the Bitcoin purchase primarily for asset diversification. First and foremost, they see Bitcoin as a superior store of value. The company’s analysis compared BTC to gold, precious stones and real estate.
Attention from Asia
Observers quickly noticed the fact that a Chinese corporation made the purchase. The focus on US companies buying crypto from corporate reserves is not a surprise. As just one example, Michael Saylor (CEO of MicroStrategy) has stayed in the spotlight since the company’s initial purchase of BTC in August 2020.
We have been so focused on S&P 500 companies buying #bitcoin but when Asian companies start joining this game too it could really set off some back and forth fire between east and west... https://t.co/SbiUREtnxW
— Jon ShapeShift (@ShapeShiftCOO) March 7, 2021
MicroStrategy basically wrote the book on corporate reserves purchases of Bitcoin, at least for the American market. On Feb. 5-6, the company held a remote conference in which it explained the legal and accounting measures required for American corporations to follow in the process. The company also made it available for free as a download of its internal playbook used when making such purchases.
The Meitu purchase is an example of how widespread this cryptocurrency bull run has become. Asian corporate purchasers are now emulating their American counterparts. Closer to the US, though, investment companies face pressure of a different kind. Canadian investment firms are ahead with Exchange Traded Funds (ETFs). The Purpose Bitcoin Fund, which is traded on the Toronto Stock Exchange, is the first Bitcoin ETF in North America.
Not to be outdone by the Bitcoin crowd, the world’s first Ethereum ETF has been given preliminary approval for trading on the Toronto exchange as well. Given the growing competition for increasingly scarce BTC at hand, MicroStrategy might need to write the book on how to find it in the first place.