China-based photo editing software maker Meitu Inc. is the latest corporation to allocate part of its cash reserve to cryptocurrency investments.
According to a CNBC report today, the firm said it had acquired $40 million worth of Bitcoin (BTC) and Ether (ETH).
As per the announcement, Meitu bought 15,000 Ether and 379.1214267 Bitcoins worth around $22.1 million and $17.9 million, respectively, when the company purchased on March 5.
The rationale behind Meitu committing large amounts of funds to ETH is not far-fetched as the Hong Kong-listed firm is planning to develop Ethereum-based decentralized applications (dApps) in the future.
Meitu Picks Crypto As Hedge Against Inflation
Notably, the purchase is part of Meitu’s investment plan to acquire up to $100 million worth of crypto, which cash reserves will exclusively finance.
The firm stated that part of its reason to allocate a portion of its cash reserve to crypto is the rapid decline in fiat currencies’ value, caused by the unending supply of banknotes by central banks globally.
“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 in the announcement.
Meitu To Delve Into Blockchain Investments
While Meitu plans to preserve its monetary value via its foray into crypto, the firm also hoped that the move would demonstrate to investors and shareholders that it can embrace technological evolution.
Furthermore, Meitu is also considering deploying blockchain across its overseas businesses and investing in blockchain-related projects.
The move comes on the heel of institutional investors flocking into the crypto industry to hedge against inflation amid the coronavirus (COVID-19) pandemic.
Several corporate investors, including Tesla, MicroStrategy, etc., have openly declared their investments in cryptos, especially Bitcoin, with Meitu being the first major company to purchase a large Ether volume second-largest cryptocurrency by market cap.