Chinese app Meitu invests $40m in cryptocurrency

The firm said it had bought $22.1m worth of Ether and $17.9m worth of Bitcoin on March 5

Chinese photo editing app Meitu has bought $40m (€33m, £28m) of cryptocurrencies, causing its Hong Kong-listed shares to rise as much as 14.4 per cent.

The beauty-focussed technology firm said that it bought $22.1m worth of Ether, the world’s second-largest cryptocurrency by market capitalisation, and $17.9m worth of Bitcoin on March 5.

Meitu is the latest company to say it will hold cryptocurrencies as part of its treasury operations after Tesla revealed it had bought $1.5bn of Bitcoin, sending the token’s price up 20 per cent.

But the Chinese appmaker appears to be the first major company to buy Ether, a cryptocurrency that works on the Ethereum blockchain. Bitcoin is based on its own blockchain.

Ethereum is a completely different network. It’s an open-source blockchain that allows developers to build apps on it. The cryptocurrency Ether can be used to pay or interact with services built on top of the Ethereum network. 

Meitu said the purchase was partly for investment and partly as preparation to enter the blockchain industry, and that it would finance it from its existing cash reserves.

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Meitu said in a statement that “blockchain technology has the potential to disrupt both existing financial and technology industries, similar to the manner in which mobile internet has disrupted the PC internet and many other offline industries.”

Ether powers contracts and applications on the Ethereum network, and so buying it was a “logical preparation”, the company said.

Shares of Meitu were 3.3 per cent higher at 1:44 pm Hong Kong time after rising over 14 per cent earlier in the day.

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