In early March 2021, Meitu—a once-popular Chinese photo-editing app maker—made headlines by announcing a bold $40 million investment in cryptocurrencies. The company purchased approximately 15,000 ETH and 379.12 BTC, allocating nearly half of its approved $100 million crypto investment budget. This strategic move, while generating buzz, raises a critical question: Can Meitu reverse its declining business trajectory through blockchain and digital assets?
With its core business facing prolonged stagnation and user growth plateauing, Meitu’s pivot toward crypto reflects a growing trend among tech firms seeking innovation amid uncertainty. But is this a visionary hedge against inflation and a gateway to Web3, or a high-risk gamble that could further destabilize an already fragile enterprise?
Let’s explore the full picture.
A Strategic Move Into Digital Assets
On March 5, 2021, Meitu executed a major crypto acquisition:
- $22.1 million in Ethereum (ETH) — roughly 15,000 units
- $17.9 million in Bitcoin (BTC) — totaling 379.1214267 BTC
This purchase was conducted under a board-approved plan allowing up to $100 million in digital asset investments using existing cash reserves. At the time of the announcement, the company still had **$60 million in headroom** for future crypto allocations.
Meitu’s leadership framed the decision around long-term value preservation and technological foresight. In their official statement, the board compared blockchain’s potential to that of mobile internet in 2005—early, disruptive, and full of opportunity. By diversifying part of its cash holdings into crypto, Meitu aims to hedge against global inflation and position itself at the forefront of financial innovation.
Beyond investment, Meitu is exploring practical applications. The company revealed it is evaluating ways to integrate blockchain into its overseas operations, including launching Ethereum-based decentralized apps (DApps) and identifying promising international blockchain ventures for potential partnerships or funding.
Declining Core Business: The Need for Reinvention
Founded in 2008, Meitu built a reputation on beauty-centric digital tools like MeituPic, BeautyCam, and Meipai (Meitu Video). It went public on the Hong Kong Stock Exchange in 2016 with promise, but since then, performance has faltered.
Key challenges include:
- Stagnant revenue: After peaking in 2017, revenue dropped sharply—falling 37.8% year-over-year in 2018 to RMB 2.79 billion.
- Persistent losses: Adjusted net loss reached RMB 879.1 million in 2018.
- User engagement plateau: Monthly active users (MAUs) hovered around 295 million as of mid-2020—impressive but flat-lining.
- Advertising dependency: Over half of Meitu’s income comes from ads, a sector hit hard during the pandemic.
To adapt, Meitu shifted from hardware to software and services. In 2019, it exited the smartphone market, licensing the brand to Xiaomi. That same year and again in 2020, the company underwent significant layoffs—cutting over 15% of staff—to reduce costs.
Attempts to diversify include entering the medical aesthetics (medtech) space and experimenting with e-commerce livestreaming, yet these initiatives have yet to generate substantial returns.
With traditional monetization models under pressure, Meitu’s crypto bet may be less about speculation and more about survival.
Founder’s Longstanding Crypto Vision
Meitu’s crypto pivot isn’t sudden—it aligns with founder Cai Wensheng’s long-term interest in blockchain.
As early as 2014, Cai invested in OKEx, one of China’s largest crypto exchanges. In a 2018 interview, he revealed personal ownership of 10,000 BTC, signaling deep conviction in Bitcoin’s long-term value.
His venture capital firm, Longling Investment, also backed FCoin—an exchange that later collapsed amid allegations of fraud and was investigated by Beijing police in 2019. While this venture soured, it underscores Cai’s willingness to take risks in emerging crypto markets.
In 2017, amid China’s ICO crackdown, rumors linked Meitu to a token called BEC (BeautyChain). Cai clarified that BEC was merely associated with BeautyPlus—a Meitu app—and that Meitu itself never issued any tokens.
Now, with Meitu officially acquiring BTC and ETH as long-term value reserves, Cai appears to be executing a broader vision: transforming Meitu into a bridge between consumer tech and decentralized finance.
Following MicroStrategy and Tesla’s Lead
Meitu isn’t alone in betting big on crypto. It joins a growing list of public companies treating Bitcoin as a treasury asset.
MicroStrategy: The Blueprint
- Once a struggling enterprise software firm.
- CEO Michael Saylor began buying Bitcoin aggressively in 2020.
- Now holds over 90,531 BTC, valued at ~$4.26 billion.
- Share price surged from ~$150 to over $280 within months.
- Morgan Stanley acquired a 10% stake, validating the strategy.
Tesla: The Catalyst
- Elon Musk announced a $1.5 billion BTC purchase in early 2021.
- Also began accepting Bitcoin as payment (later paused).
- Sparked widespread institutional adoption.
Meitu mirrors these moves—but with key differences:
- Smaller scale: $40 million vs. billions.
- Weaker financial foundation: declining revenue vs. Tesla’s growth.
- Less market influence: no equivalent to Musk’s social media power.
Still, the symbolism is clear: digital assets are becoming part of corporate finance strategy.
Market Reaction: Short-Term Buzz vs. Long-Term Viability
The immediate market response was mixed:
- Shares briefly jumped over 14% following the announcement.
- Later reversed course, closing down nearly 5%.
- Crypto prices rose—BTC surpassed $50,000; ETH hit $1,700—meaning Meitu’s holdings gained value quickly.
However, analysts remain cautious. Chen Yu, a crypto market analyst, noted that while the move provides short-term excitement, crypto volatility and unclear blockchain integration make long-term success uncertain.
Frequently Asked Questions (FAQ)
Q: Why did Meitu invest in cryptocurrency?
A: To diversify its cash reserves, hedge against inflation, and position itself for future growth in blockchain technology.
Q: Is Meitu the first Hong Kong-listed company to buy crypto?
A: Yes—it became the first publicly traded company on the Hong Kong Stock Exchange to disclose direct cryptocurrency holdings.
Q: How much crypto does Meitu own?
A: As of March 2021, approximately 15,000 ETH and 379.12 BTC, worth $40 million at purchase.
Q: Will Meitu launch its own cryptocurrency?
A: No official plans have been announced. The company denies issuing any tokens, including BEC (BeautyChain).
Q: Is Meitu profiting from its crypto investment?
A: Initially yes—BTC and ETH prices rose after purchase—but crypto is highly volatile; gains can reverse quickly.
Q: Can crypto save Meitu’s declining business?
A: Unlikely alone. While it brings attention and potential asset appreciation, sustainable recovery requires stronger core product innovation.
Despite skepticism, Meitu’s move highlights a shift in how companies view money and technology. In an era of low interest rates and rising inflation fears, Bitcoin and Ethereum are no longer fringe assets—they’re part of the corporate balance sheet conversation.
Yet for every MicroStrategy success story, there are risks. Regulatory uncertainty, technical complexity, and market swings mean this path isn’t for the faint-hearted.
For Meitu, the $40 million bet may not revive its user base or ad revenue overnight—but it signals ambition. Whether that ambition translates into lasting value depends on execution beyond crypto purchases: real product integration, user-centric blockchain features, and financial discipline.
As blockchain continues maturing, companies like Meitu face a choice: innovate or fade.
👉 Stay ahead of the curve—explore how blockchain is redefining modern business strategies today.
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