Meitu loses more than $43 million in crypto investments amid bear market

Meitu loses more than $43 million in crypto investments amid bear market

Over the past year, Bitcoin has reached the $50,000 mark for the first time and exceeded many expectations. As a result, several investors bought bitcoin at the time. Hong Kong tech giant Meitu was one of the companies that bought bitcoin as a treasury reserve.

As the market fell, the tech giant suffered an impairment loss. This is a type of loss where the value of the property falls below the book value of the investment.

Bitcoin lost over 50% of its value in Q2 2022, BTC’s worst quarterly performance since Q3 2011. The decline in the value of BTC is devastating to many of its investors.

Meitu has lost almost half of its crypto holdings due to the emergence of a bear market this year. However, the tech firm made headlines in April 2021 allegedly buying around $100 million worth of cryptocurrencies.

The collapse of Meitu’s Crypto holding

Local media discovered Statement by Meitu on its BTC holding. According to the report, the company lost more than 300 million yuan, worth approximately $43.4 billion, on crypto investments.

Bitcoin is on the decline | Source: BTCUSDT chart from TradingView.com

Recall that Meitu revealed that he had about 940 BTC and 31,000 ETH during the July exchange. The respective token purchase amounts are $49.5 million and $50.5 million. This brought the company’s net investment in cryptocurrencies to $100 million.

However, the company has lost almost half of its investment value by the second quarter of 2022 due to the recent decline in the crypto market. In addition, financial filings revealed that the impairment loss more than doubled from the last quarter, as Meitu had previously expected.

Also, the company said that the loss of value of crypto holdings will have more drastic effects on its performance. As a result, this could lead to a net loss for the firm in its second quarter report.

MicroStrategy, Tesla and others suffered losses

Besides Meitu, other prominent companies have experienced significant losses through crypto investments. For example, MicroStrategy, a leading public company that invests in Bitcoin, also reported an impairment loss. The company reported a loss of over $900 million on BTC funds through the second quarter of 2022.

At the height of last year’s stock market, Microstrategy, headed by Michael Salor, used Bitcoin as a cash reserve. This move made Bitcoin more popular against the US dollar. The idea became very attractive when Bitcoin climbed to an all-time high every month.

Companies like SpaceX, Telsa and dozens of others have joined the trend. However, the bubbles burst with the arrival of a bear market as the price of BTC fell. As a result, Bitcoin has fallen off its peak and is now trading at one-third of its previous peak.

Featured image from Pixabay, chart from TradingView.com



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