Leading Chinese gaming company lines up $100M crypto investment
As yet another indicator of the rising trend of institutional crypto investments, China’s premier board and card game company, Boyaa Interactive, has unveiled plans to invest up to $100 million in cryptocurrency assets, with a focus on Bitcoin (BTC) and Ethereum (ETH).
News of Boyaa’s plans emerged following a disclosure from the Hong Kong Exchanges and Clearing Limited, which stated that the company will distribute notices regarding its crypto investment plans during an extraordinary general meeting (EGM). The relevant details are expected to have been supplied to shareholders on or before Nov. 30. The company has emphasized its intention to ensure transparency while adhering to listing rules throughout this process.
Digital asset acquisition over a 12-month period
The decision to delve into the world of cryptocurrencies aligns with Boyaa Interactive’s commitment to strengthening its presence in the evolving Web3 landscape, as highlighted by the company’s board of directors. The proposal outlines a comprehensive strategy to acquire the assets over a 12-month period, pending approval at the upcoming EGM.
The planned acquisition involves allocating approximately $90 million equally between Ethereum and Bitcoin. The remaining $10 million is earmarked for stablecoins Tether (USDT) and USD Coin (USDC). Boyaa Interactive asserts that the actual acquisitions will depend on open market conditions, with a commitment not to pay premiums exceeding 10% of prevailing market prices. Funding for this initiative will be sourced from the company’s existing cash reserves.
The board will play a crucial role in determining the specific cryptocurrencies to acquire, their allocation ratios and the optimal timing for purchase. The emphasis is on prudent risk management, aligning with Boyaa’s business development strategies.
Diversification strategy
The company justifies its choice of Bitcoin and Ethereum by citing their alignment with its long-term development goals. In the document, Boyaa Interactive highlights the importance of investing in cryptocurrencies with robust market liquidity and substantial market values. Bitcoin, Ethereum, USDC, and USDT, chosen for their high market liquidity, align seamlessly with Boyaa’s strategic vision.
In its stock exchange filing, it justifies these plans on the basis of a desire to diversify its holdings. The document reads:
”[The] purchase of cryptocurrencies is also an important arrangement for the Group’s asset allocation, as allocating part of the Group’s idle reserve funds in cryptocurrencies can serve as a diversification to holding cash in treasury management, and a measure to balance investment risks and returns.”
Growing asset acceptance
The move into the cryptocurrency market comes at a time when institutional investors are increasingly flocking to major assets like BTC and ETH. Reports indicate significant inflows of institutional funds into these cryptocurrencies, setting the stage for what appears to be an extended bull market.
Boyaa first showed an interest in holding crypto on its balance sheet back in August when it proposed allocating $5 million towards cryptocurrency investment. The company following up with a $100 million investment serves as a testament to the growing acceptance and integration of cryptocurrencies within mainstream business strategies.
