The digital asset space attracts some strong institutional support as China-based company, Meitu, buys $40 million worth of Bitcoin and Ethereum. Institutional backing might be inevitable for Ethereum as the high-net-worth buyer see the assets as suitable alternatives. Early this year, Bitcoin’s 2020 success led to the pull of more institutional investors, who don’t want to miss out on the next surge and have bought heavy crypto holdings to assure more gains.
While Bitcoin has been experiencing some unwanted corrections for the past few days, the investors took the opportunity to buy the dip, which might be the only time Bitcoin might drop to the $40,000 range. People bought to assure more significant gains.
Meitu buys $40 million worth of crypto
The tech company seems to be more interested in Ethereum than Bitcoin, as the firm copped $22 million worth of Ethereum, which is around 15,000 ETH. While the BTC purchase is worth 18 million, and it got the firm 380 BTC. China has one of the largest markets for cryptocurrencies, not only because most of its miners come from that region but because the Asians popularly use the asset as a cross-border payment means.
Digital assets are changing things in the payment sector and help people settle payments at a much faster rate. The technology bypasses the time-wasting centralized nature of traditional banks to give people better services.
Bitcoin’s decentralized nature is not without problems, as people believe that the absence of intermediaries would cause the platform to be used for malign and illicit purposes. Third-parties in the traditional banking system are the ones who mandate the users to follow laid-down governmental regulations.
The app company excitedly shared the news of the new purchase, and the digital asset space sees it as mainstream companies moving into the cryptocurrency industry. Interestingly, the company is a known organization, as it is listed under Hong Kong’s stock market, and their purchase would most likely attract some attention.
Tech stocks see a continuous fall
CnLedger via Twitter also announced the news while asking if Asian entrepreneurs are following in the step of Michael Saylor, CEO of MicroStrategy, and Elon Musk, CEO of Tesla, who both invested heavily in cryptocurrencies. Unfortunately for Tesla, its stocks are not doing very well, causing some problems for investors holding the asset.
There is a current ongoing problem for tech-based stocks because the whole industry is going downwards the charts, which worries everyone. Tech stocks had one of the best years in 2020, evident in Tesla’s stock which moved from a low price to $500 within the year alone.
Could the price fall mean that investors are no longer confident in tech-based firms? Experts believe that the whole industry is going through rough times, and it might take a while for recovery to come into place. Meitu’s creators also shared more details on their new investments.
The creators chose to invest in cryptocurrencies because of their volatile nature, which would give shareholders value in the long-term. The firm seems to plan to hold the cryptos for a long time, being another addition to institutional investors’ long list.