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Tech big Meitu loses over $43M of its crypto funding in bear market

Hong Kong tech big Meitu made headlines in April 2021 after it reported almost $100 million in crypto holdings. Nevertheless, with the onset of the bear market, the tech agency has misplaced almost half of the valuation of its crypto holdings.

In response to an area media report, Meitu reported an impairment lack of over 300 million yuan ($43.four million) on its crypto holdings. An impairment loss is a loss within the worth of an asset when it falls beneath the carrying worth of the funding.

The monetary submitting revealed that the impairment loss has greater than doubled from the final quarter, one thing the agency had anticipated. The tech big has stated that its crypto holdings may impression the web lack of the corporate by the top of the primary half of the yr.

In a July alternate submitting, Meitu reported crypto holdings of about 940 Bitcoin (BTC) and 31,000 Ether (ETH), bought for $49.5 million and $50.5 million, respectively. The web crypto funding of the corporate was reported to be about $100 million, and the agency has misplaced almost half of the valuations of its funding by the top of the second quarter of 2022, owing to the present downturn within the crypto market.

Associated: MicroStrategy inventory MSTR hits 3-month excessive after CEO’s exit

Meitu is just not the one firm to incur important losses on its crypto investments. MicroStrategy, the flag bearer of public firms investing in Bitcoin, reported an impairment lack of over $900 million on its BTC holdings as of the second quarter of 2022.

On the peak of the crypto bull run final yr, Michael Saylor-led MicroStrategy popularized using BTC as a treasury reserve changing a portion of the U.S. greenback. The thought gained loads of traction as BTC was hitting a brand new all-time excessive each month, and the likes of Tesla, SpaceX and greater than a dozen public firms joined the bandwagon. Nevertheless, Bitcoin’s value has fallen by over 70% from its prime and is at the moment buying and selling at one-third of its all-time excessive worth.