Key Takeaways
- Major Investment: Meitu Inc. allocates $40 million (25% of 2019 revenue) to Ethereum and Bitcoin.
- Strategic Move: Positions itself in blockchain technology while diversifying cash reserves.
- Market Reaction: Initial stock surge followed by 6.27% drop amid mixed investor sentiment.
Meitu's Bold Cryptocurrency Purchase
On March 7, 2021, Meitu Inc. (HKEX: 1357) announced the acquisition of 15,000 ETH ($22.1M) and **379.12 BTC** ($17.9M), marking one of the first Hong Kong-listed companies to adopt crypto as part of its treasury strategy.
Investment Rationale
- Hedge Against Inflation: Cites global monetary devaluation risks due to central bank policies.
- Blockchain Expansion: Prepares for future dApp development and blockchain partnerships.
- Market Trends: References institutional adoption (e.g., insurance firms, crypto-focused funds).
"This demonstrates our commitment to innovation and positions us for blockchain opportunities," stated Chairman Cai Wensheng.
Criticism and Challenges
Despite its ambitions, Meitu faced backlash:
- Profitability Concerns: 2016–2020 cumulative losses exceeded $800M.
- Core Business Neglect: Users questioned prioritization of crypto over app development.
- Market Volatility: Shares fell 6.27% post-announcement, reflecting investor skepticism.
Public Sentiment
- "If you believe in crypto, build your own—don’t just speculate."
- "Tesla bought $1.5B; Meitu buys $40M—both are betting on volatility."
Tesla’s Precedent: A Double-Edged Sword
In February 2021, Tesla’s $1.5B Bitcoin purchase briefly boosted BTC prices but drew scrutiny:
- Price Swings: Tesla’s stock dropped 33% from its January peak amid crypto debates.
- Regulatory Risks: Highlighted Bitcoin’s volatility in SEC filings.
👉 How Tesla’s crypto move reshaped corporate investments
FAQ: Corporate Crypto Investments
Q1: Why are companies like Meitu investing in cryptocurrencies?
A: To diversify assets, hedge against inflation, and signal technological adaptability.
Q2: What risks do crypto investments pose?
A: Extreme volatility, regulatory uncertainty, and potential reputational damage.
Q3: How does Meitu’s move compare to Tesla’s?
A: Both aim to innovate, but Tesla’s scale and market influence are significantly larger.
Q4: Will Meitu accept crypto payments?
A: Not yet announced, but Ethereum reserves suggest future dApp integration.
👉 Corporate crypto strategies explained
Conclusion
Meitu’s crypto gamble reflects growing corporate interest in digital assets, yet challenges persist in balancing innovation with core business stability. As blockchain adoption accelerates, such investments may become a litmus test for tech-forward enterprises.
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