Chinese app developer Meitu said Thursday that its wholly-owned subsidiary in Hong Kong acquired an additional 175.6 units of Bitcoin for approximately $10 million, bringing its total purchase of the cryptocurrency to over 940 coins worth about $100 million.
Earlier in March, 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.
“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.
“Being an alternative store of value, its price is primarily a function of future demand that is driven by the consensus of investors and the general public,” said Meitu, adding that it has seen growing momentum in the consensus-building process.
The company mentioned that cash is subject to depreciation pressure due to aggressive increases in money supply by central banks globally, and Bitcoin has the potential to act as an effective hedge against the depreciation of fiat currencies.
Meitu is also buying cryptocurrencies to prepare for its foray into the blockchain industry, according to the filing.
Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of currency units and verify the transfer of funds using blockchain technology. Bitcoin is a cryptocurrency launched over a decade ago.