The recent announcement by MicroStrategy, the world's largest corporate holder of Bitcoin, revealed a combined market value of $4.53 billion for its Bitcoin and corporate stock holdings, representing a 210% growth. This development has once again drawn significant market attention to corporate cryptocurrency investments.
With increasing acceptance from mainstream financial institutions, more publicly traded companies are incorporating crypto assets into their treasury management strategies. According to data from CoinGecko, as of August 14, there are at least 25 publicly listed companies globally that hold Bitcoin, collectively possessing approximately 232,000 BTC. This represents about 1.2% of Bitcoin’s total circulating supply, with a market value exceeding $6.79 billion.
Among these global players, several are based in China. At least eight Chinese publicly listed companies have formally announced the inclusion of crypto assets in their asset allocation strategies. These firms have engaged primarily through direct holdings of cryptocurrencies or investments in mining equipment, with several holding substantial digital asset portfolios.
Meitu: $100 Million Invested in Ethereum and Bitcoin
Meitu was the first Hong Kong-listed company to invest in digital assets. As early as March 7, March 17, and April 8, 2021, the company purchased approximately 31,000 ETH and 940.89 BTC, totaling $100 million in investment. At the time, Cai Wensheng, the company's chairman, publicly stated that Meitu would purchase ETH and BTC as a strategic long-term value reserve for its blockchain initiatives.
However, Meitu has reported significant paper losses due to the crypto market downturn. Data from CoinGecko indicates that as of August 14, the value of Meitu's Bitcoin holdings was approximately $27.49 million, representing a decline of about 44.5% from the original purchase value.
Despite these unrealized losses, Meitu has not sold any of its cryptocurrencies. In a February announcement, the company stated that cryptocurrencies are an indispensable part of its strategy and that there is ample room for growth in crypto adoption. It considers recent fluctuations in Ethereum and Bitcoin prices to be temporary and remains optimistic about the long-term prospects of its holdings.
Notably, as far back as 2018, Cai Wensheng publicly announced that he had achieved a personal goal of holding 10,000 Bitcoin.
LK Technology: $1.24 Million for Approximately 44.2 Bitcoin
Founded in 2007, LK Technology is a mobile game and interactive entertainment developer listed on the Hong Kong Stock Exchange since December 30, 2014. In July 2023, the company announced it had spent $590,000 and $650,000 over the previous month to purchase approximately 44.2 BTC on the open market.
The announcement stated that the purchase is part of the group's Web3 business development and asset allocation strategy. This move is intended to signal to investors and stakeholders the company's ambition and commitment to embracing technological innovation, thereby preparing for its entry into the blockchain industry.
Boyaa Interactive: $5 Million Budget Approved for Bitcoin and Ethereum
Boyaa Interactive is a leading Chinese online card and board game company, known for titles like Boyaa Texas Hold'em, Boyaa Dou Dizhu, and Boyaa Chinese Chess. As a Hong Kong-listed entity, the company recently announced that its board had approved a $5 million budget for purchasing cryptocurrencies, primarily Bitcoin and Ethereum, over the next year.
This initiative is aimed at advancing the company's future business layout in the Web3 field. Boyaa Interactive clarified that the funds would come from cash reserves generated by its operations in Hong Kong and overseas. The purchases will be executed on regulated and licensed trading platforms, contingent on market conditions, and in strict compliance with relevant jurisdictional policies on cryptocurrency.
Zhidu股份: Subsidiary's Bitcoin Holdings Impair $63.18 Million
Listed on the Shenzhen Stock Exchange, Zhidu股份's core business is the aggregation and operation of mobile internet traffic. Earlier this year, the company released an announcement forecasting a net loss between $30.5 million and $39.5 million, which included an impairment loss of $63.18 million from Bitcoin held by a subsidiary.
The company acquired its Bitcoin in 2021 as a result of purchasing blockchain hash rate cloud services from Bitdeer. The Bitcoin generated by this hash rate belonged to the company as a service outcome. Its Hong Kong subsidiary completed an initial procurement of $12 million worth of such services from Bitdeer. However, as of May this year, Zhidu股份 stated that it had no plans to continue purchasing Bitcoin after the cooperation agreement expired.
The9 Limited: Purchased Miners for Bitcoin and Filecoin, Received 126 BTC Reward
The9 Limited is a game developer and operator founded in 1999 and listed on Nasdaq in 2004. Since January 2021, the company began frequently purchasing large quantities of miners for Bitcoin, Filecoin, and Chia. It even partnered with Coinbase to open a custody account for storing its cryptocurrencies.
For instance, in January 2021, The9 completed the deployment of 36,496 Bitcoin miners through two separate procurements. In November 2021, it collaborated with Compute North to expand a 32-megawatt mining farm in the U.S. and deploy 10,000 Antminer S19j pros. While the company has not publicly disclosed its total Bitcoin holdings, its fiscal year 2020 report from March 2021 noted that it had received 126 BTC in mining rewards.
NetDragon Websoft: Cryptocurrency Holdings Valued at $127 Million in 2021
NetDragon Websoft Holdings, a Hong Kong-listed company, is primarily engaged in the development and operation of online games. In September of last year, the company reported an impairment loss of $5.52 million on its cryptocurrency investments. Its 2021 annual report had previously shown the book value of its cryptocurrency holdings at $127 million.
Times Universal Group: $639,000 Invested in 12,000 Filecoin
Times Universal Group Holdings Limited is a diversified Hong Kong-listed holding company with core businesses in hotel operation, property management services, and property investment.
In November 2022, the company announced that its wholly-owned subsidiary had purchased 12,000 Filecoin (FIL) through on-exchange trades for a total of approximately $639,000. However, in a subsequent announcement from November, the company stated its intention to sell all of its crypto assets, expecting to recognize a gain of about $900,000 from the sale. It announced it would no longer engage in cryptocurrency investment.
The announcement cited the market downturn that began in 2022, noting that the company had been actively seeking opportunities to divest its holdings. After considering the current state of the crypto market, the directors believed that selling all cryptocurrencies to avoid further price volatility was in the best interest of the group.
Global Strategic Group: $1.3 Million for 23.4 Bitcoin
Global Strategic Group is a Hong Kong-listed company whose main businesses include tourism, hotels, and entertainment. In 2021, the group announced on the Hong Kong Stock Exchange that it had purchased approximately 23.4 BTC on a public cryptocurrency trading platform on May 10, 2021. The total cost was about $1.3 million, funded by the group's internal resources.
👉 Explore advanced investment strategies
Frequently Asked Questions
Why are publicly traded companies investing in Bitcoin and other cryptocurrencies?
Companies are adding crypto assets like Bitcoin to their treasury reserves as a hedge against inflation and a potential store of value. It is also seen as a strategic move to embrace innovative technology and signal forward-thinking to investors in the rapidly evolving Web3 space.
What are the risks associated with corporate cryptocurrency investments?
The primary risks include high price volatility, which can lead to significant impairment losses on financial statements, regulatory uncertainty across different jurisdictions, and the operational challenges of securely storing and managing digital assets.
How do companies account for cryptocurrency on their balance sheets?
Accounting treatment varies by region and accounting standards. Often, cryptocurrencies are treated as intangible assets with an indefinite life. They are typically recorded at cost on acquisition and are subject to impairment testing if the market price falls below the carrying value, but often cannot be written up until sale.
Did any of these Chinese companies sell their crypto holdings?
Some, like Times Universal Group, have announced plans to divest their holdings to avoid further market volatility. Others, like Meitu, have stated they are holding for the long term and have not sold any assets despite market conditions.
Is this trend of corporate crypto investment growing?
Yes, the trend has been growing since 2020, with MicroStrategy being the most prominent example. While the bear market of 2022 tempered enthusiasm, established companies continue to explore and announce new allocations as the market evolves and institutional infrastructure improves.
What is the difference between buying Bitcoin directly and buying mining equipment?
Buying Bitcoin directly provides immediate exposure to its price. Investing in mining equipment involves capital expenditure on hardware and ongoing operational costs (like electricity) to produce Bitcoin, which offers leveraged exposure to the price but introduces operational complexity and risk.