Chinese Games Company To Buy $100 Million In Crypto

In a development that has echoes of 2020 and 2021's news of Microstrategy, Tesla, and other companies investing in Bitcoin, Chinese Games company Boyaa Interactive has announced it will be diversifying $100 million from its cash reserves into various cryptocurrencies over the course of the next 12 months.

BTC And ETH

A press release published by Boyaa stated that the company intended to buy $45 million in bitcoin and $45 million in ether, plus a further $10 million in USDC and USDT. So long as shareholders sign off on the plan, Boyaa will make the purchases via licensed trading platforms in Hong Kong.

Boyaa's press release stated that the move was an important measure for the structure and development of the business, as well as being an critical element of the Group’s asset allocation strategy. The board is seeking shareholder approval of the total amount, which will allow the company to make purchases at the right time, since volatility in the crypto markets means being able to move fast is vital and it would be impractical to seek shareholder approval for every purchase.

The significant investment is part of Boyaa's keen interest in Web3. The press release mentions the company's intention to explore this new source of revenues further—a natural move, given their expertise in conventional online card and board games. Boyaa hints (translation below) that they may be able to contribute to the broader Web3 gaming ecosystem, which has so far struggled to come up with sustainable tokenomic models.

The Group's main Internet game business is highly consistent with Web3 technology, which attaches great importance to communities and users... At present Web3 games are still in their infancy and are exploring and trying to establish their unique game rules and operating mechanisms. Our group has launched game products in multiple languages ​​in hundreds of countries and regions and is a global Internet game operator. This gives us a huge advantage in developing Web3 games, and we have been deeply involved in the field of Internet games for many years.

A Virtuous Cycle Of Adoption

Boyaa's intended purchases add the company to the list of organizations that have hedged their reserves by investing in cryptocurrencies, most notably Microstrategy. At current prices, their $90 million investment will gain them 1,250 BTC and 22,500 ETH.

The use of BTC as a hedge against inflation, and as a tool for diversifying an investment portfolio, was an important narrative in the prior market cycle. As more companies explore these use cases, news spreads and the strategy is normalized—meaning that more companies are introduced to the idea and follow suit.

Thus Boyaa's purchases are an important step in the virtuous cycle of crypto adoption: The more organizations buy BTC, the more will realize the benefits.

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