Chinese beauty app “Meitu” buys $22M Ethereum and $18M Bitcoin

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Meitu, a Chinese tech company known for a popular photo-editing app, said Sunday that it bought $40 million worth of cryptocurrency which includes about $18 million worth of bitcoin and more than $22 million worth of ethereum.

“Cryptocurrencies have ample room for appreciation in value,” the company said in a filing to the Hong Kong stock exchange.

Meitu stated that purchasing the cryptocurrencies helps the company diversify its cash holdings, and said it showed that the firm aims to “embrace technological evolution, and hence prepare its foray into the blockchain industry.” It added that the company’s board has approved it to buy as much as $100 million worth of cryptocurrency.

Both currencies increased early Monday, but soon reversed gains.

Bitcoin was last down 2.4% to trade at $49,560 per coin. Ethereum was down 0.3% to $1,676. Meitu’s stock, meanwhile, was volatile in Hong Kong. It rose as much as 14%, but closed down more than 6%, as tech stocks sold off.

Meitu, which means “beautiful pictures” in Chinese, makes selfie image-enhancing apps that enables users to make their eyes look wider, skin lighter, and faces slimmer. It has nearly 300 million monthly active users, according to its most recent financial report.

Prices of cryptocurrencies have increased in recent months, benefiting from a weaker US dollar and expectations that a prolonged period of super low interest rates would create inflation.

Cryptocurrencies have also been getting validation from some big names in Corporate America.

Bitcoin recently saw its market value shoot past $1 trillion —mostly thanks to Tesla (TSLA), which said last month that it had purchased $1.5 billion worth of bitcoin. Elon Musk’s carmaker also said it was looking at letting consumers use bitcoin to buy its cars and SUVs.

Payments giants Square (SQ) and PayPal (PYPL) recently started allowing customers to trade bitcoin. Credit card processing behemoths Visa (V) and Mastercard (MA) are also embracing cryptocurrencies.

But there are some risks.

Bitcoin has pulled back from its February peak, with a current market value of about $930 billion, according to Coinbase.

Meitu acknowledged in its company filing Sunday that crypto prices “in general” are “highly volatile,” leading it to focus on only the two market leaders, Bitcoin and Ethereum.

US Treasury Secretary Janet Yellen, meanwhile, expressed worries last month about bitcoin’s wild price fluctuations. Bitcoin has dropped 15% in the past two weeks, but is still up more than 70% since start of this year.

“It is a highly speculative asset, and I think people should beware. It can be extremely volatile, and I do worry about potential losses that investors in it could suffer,” Yellen stated at a conference in New York.

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