Hong Kong’s Meitu Reveals Crypto Holdings Worth $100mln
Hong-Kong tech firm Meitu has revealed that the aggregate value of cryptos held by the company is roughly $100 million, following the purchase of another $10 million worth Bitcoin (BTC) on April 8. Meitu HK, the 100% subsidiary of Meitu Inc, a firm established in the Cayman Islands, bought 175.67798279 Bitcoins for a total price of $10 million, translating to a purchase price of about $57,000 per Bitcoin. The purchase of Bitcoin was carried out utilizing cash reserves, on the basis of spot prices in the open market.
In March, Meitu bought $90 million worth cryptos, which includes Ether (ETH) and Bitcoin (BTC). Including the recent acquisition, the company owns $49.50 million worth Bitcoin and $50.50 million worth Ethereum.
The company had earlier stated that it could not have made its earlier purchases without the assistance from the US-based cryptocurrency exchange Coinbase. Even though there is no mention of Coinbase in the recent disclosure, earlier, the cryptocurrency exchange was responsible for managing the investments of other corporates such as MicroStrategy.
The revelation puts forth the company’s reasons to increase its Bitcoin holdings, comparing the technology’s likely effect to that of mobile based internet:
“The Board takes the view that blockchain technology has the potential to disrupt both existing financial and technology industries, similar to the manner in which mobile internet has disrupted the PC internet and many other offline industries.”
The revelation indicates the Bitcoin’s position as a store of value, an aspect assisted by its constricted supply. Other prominent features mentioned are portability and its status as a hedge against inflation created by the vigorous money printing processes of central banks.
The disclosure states:
“Some of these features potentially even render Bitcoin as a superior form to other alternative stores of value such as gold, precious stone and real estate. Being an alternative store of value, its price is primarily a function of future demand that is driven by consensus of investors and the general public.”
China headquartered publicly traded firms find it cumbersome while investing in cryptocurrencies. Beijing regards cryptos as commodities but not as usable one. The country has issued a blanket ban on trading cryptos against fiat. However, as they are regarded as commodities, a portion of crypto investors suggest that cryptocurrency pairs can be traded, but there is not clarity as yet.