Meitu Inc., a creator of image and video editing applications, announced that it had bought $22 million in ether (ETH) and $17.9 million in bitcoin (BTC), marking the first time a company had publicly revealed a significant ETH purchase for its treasury.
On March 5, Meitu said it purchased 15,000 ETH and 379.1 BTC in open market transactions.
The investments were made in accordance with the conditions of a previously accepted cryptocurrency investment program, which requires the organization to spend up to $100 million in cryptocurrency using cash assets rather than any residual profits from Meitu’s 2016 IPO.
Although purchasing cryptocurrency helps diversify the company’s holdings away from cash, the company also said that “more specifically, the Board considers this a demonstration to investors and stakeholders that the Group has the vision and commitment to accept technical evolution, and hence planning its foray into the blockchain industry.”
The organization stated that it is assessing the viability of incorporating blockchain technology into its international operations, including the introduction of Ethereum-based decentralized applications (dApps).
The Ethereum blockchain’s native token is ETH. Meitu looking at making investments in blockchain-based ventures, with several of them accepting ETH as a form of payment.
Meitu’s Rationale for Purchasing ETH
As described in the following statement, Meitu had many reasons for adding ETH to its treasury:
Ethereum is an open-source, block-chain based, decentralized software platform that uses its own
cryptocurrency, Ether. Generally speaking, Ether is required to be consumed (as “gas”) to conduct a
transaction or execute a contract on the Ethereum platform. Currently the Ethereum network has the
largest number of decentralized applications (“dApps”) on it due to its developer-friendly interface
that enable reduced programming time to launch projects quickly as well as a strong and growing
global network of developer community who are committed to upgrade the network and drive
dApps across multiple sectors including finance, games, social media and art & collectibles
etc. have already adopted the Ethereum protocol. The Group is currently evaluating the feasibility of
integrating blockchain technologies to its various overseas businesses, including but not limited to
launching Ethereum-based dApps, as well as identifying suitable overseas blockchain-based projects
for potential investments (many blockchain-based projects accept Ether as consideration for
investment) that can be synergistic to its large user base that has hundreds million monthly active
Purchasing Ether is therefore a logical preparation for both initiatives, as the Ether purchased would
become the gas reserve for the Group’s potential dAPP(s) to consume in the future, as well as being
used as consideration for investing in blockchain-based projects that take Ether as consideration.