Meitu Lost Approximately $43 Million On Its Crypto Investment During The Bear Market

Meitu, a major Hong Kong software company, made news in April of last year after disclosing holdings of roughly $100 million in cryptocurrencies. But since the bear market started, the IT company’s cryptocurrency holdings have lost over half of their value.

Meitu recorded an impairment loss on their cryptocurrency holdings of nearly 300 million yuan, or $43.4 million, according to a local media report. An asset has an impairment loss when its value declines below the investment’s carrying value.

The impairment loss has more than doubled from the previous quarter, which the company had previously anticipated, according to the financial report. According to the IT juggernaut, at the conclusion of the first half of the year, the company’s net loss could be impacted by its cryptocurrency holdings.

Meitu declared holdings in cryptocurrencies of around 940 Bitcoin (BTC) and 31,000 Ether (ETH), bought for $49.5 million and $50.5 million, respectively, in a July exchange filing. The company reported having a net crypto investment of roughly $100 million, and due to the current bear market in cryptocurrencies, the firm had lost nearly half of the value of that investment by the end of the second quarter of 2022.

Meitu is not the only company to incur significant losses on its crypto investments

Meitu is not the only business that suffered substantial losses on its cryptocurrency investments. By the second quarter of 2022, Microstrategy, the leader among publicly traded businesses investing in Bitcoin, recorded an impairment loss on their BTC assets of more than $900 million.

The usage of BTC as a treasury reserve in place of some U.S. dollars was made popular by the Michael Saylor-led Microstaretgy at the height of the cryptocurrency bull run last year. The concept gained a lot of traction as BTC was setting new records every month, and more than a dozen publicly traded firms, including Tesla and SpaceX, joined the bandwagon.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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