Chinese app developer Meitu said Thursday that its wholly-owned subsidiary in Hong Kong acquired an additional 175.6 units of Bitcoin worth approximately $10 million, bringing its total purchase of the cryptocurrency to over 940 coins worth about $100 million. Earlier, the company bought 31,000 units of Ether worth nearly $50.5 million, according to its filing to the Hong Kong Stock Exchange released Thursday. Several major companies have invested in bitcoin this year after BTC’s massive winning rally.
“Cryptocurrencies have ample room for appreciation in value.”
“The Board believes 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 in treasury management,” Meitu said, explaining the reasons behind the Bitcoin acquisition. Notwithstanding the high volatility of cryptocurrency prices, the company believed shareholders’ value would be enhanced in the long-term through investment in the two largest cryptocurrencies by market capitalization – Ether and Bitcoin. Bitcoin is an alternative store of value, so its price is primarily a function of future demand that is driven by the consensus of investors and the general public,” said Meitu.
”Cash is subject to depreciation pressure due to aggressive increases in the money supply.”
The Chinese company mentioned that cash is subject to depreciation pressure due to aggressive increases in money supply by central banks globally. On the other hand, Bitcoin has the potential to act as an effective hedge against the depreciation of fiat currencies. According to the filing, Meitu is also buying cryptocurrencies to prepare for its foray into the blockchain industry. The recent massive winning rally of bitcoin has attracted a great amount of institutional investment. Earlier, the world’s leading electric car maker Tesla purchase $1.5 billion worth of bitcoin.