TOKYO — Companies in Asia are beginning to bet on cryptocurrencies, with South Korean gaming giant Nexon following the lead of companies such as Tesla and digital payments specialist Square, with a $100 million allocation into Bitcoin.

On April 28, Nexon said that it has shifted part of its cash into the cryptocurrency, purchasing 1,717 bitcoins at an average price of about $58,226 per bitcoin, including fees and expenses, for around $100 million.

The company, which has operations in Japan and is listed on the Tokyo Stock Exchange, was founded in 1994 by South Korean billionaire Kim Jung-ju. It is a major developer of PC and mobile games, with avid fans in countries such as South Korea, Japan, and China.

“Our purchase of Bitcoin reflects a disciplined strategy for protecting shareholder value, and for maintaining the purchasing power of our cash assets,” President and CEO Owen Mahoney said in a statement. “In the current economic environment, we believe Bitcoin offers long-term stability and liquidity, while maintaining the value of our cash for future investments.”

Nexon said the Bitcoin purchase represents less than 2% of the company’s total cash and cash equivalents on hand.

Earlier in April, Meitu, the developer of China’s wildly popular beauty-enhancing photo app, Meitu Xiuxiu, revealed that it had accumulated a total of about $100 million worth of Bitcoin and Ethereum. The Hong Kong-listed company had previously announced plans to buy up to $100 million worth of cryptocurrency with cash reserves.

In a statement, the company said: “The board believes cryptocurrencies have ample room for appreciation in value, and by allocating part of its treasury in cryptocurrencies [they] can also serve as a diversification to holding cash in treasury management.” The statement went on to say “the board considers this a demonstration to investors and stakeholders that the group has the vision and determination to embrace technological evolution, and hence [is] preparing its foray into the blockchain industry.”

The two companies are following in the footsteps of electric car maker Tesla, as a growing number of global companies invest in cryptocurrencies.

In February, Tesla announced the purchase of $1.5 billion in Bitcoin and noted that its board approved an update to the EV maker’s investment policy, which says will provide “more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.”

Tesla CEO Elon Musk, who has been an outspoken supporter of cryptocurrencies, recently revealed that the company sold 10% of its holdings of Bitcoin to demonstrate its liquidity. The company reported record earnings for the January through March period, with a $101 million accounting boost from the sale.

Meanwhile, Square, led by Twitter co-founder Jack Dorsey, as well as U.S. enterprise software maker MicroStrategy have also made significant digital currency purchases. Some companies have begun accepting them as a form of payment.

Bitcoin started surging towards the end of 2020 as investors poured into the market, pushing its price up nearly 300% last year. It continued to soar this year, hitting an an all-time high of over $63,000 in early April, but concerns over its volatility remain, with some investors pointing out that Bitcoin is a speculative investment. Berkshire Hathaway CEO and well-known U.S. investor Warren Buffett has repeatedly said he believes Bitcoin has no underlying value.

(Excerpt) Read more Here | 2021-05-05 20:01:00
Image credit: source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.