Meitu Loses Over $43 Million in Crypto Investments Amid Bear Market
During last year’s crypto bull run, Bitcoin hit the $50,000 mark for the first time and exceeded many expectations. As a result, several investors bought bitcoin at that time. Hong Kong Tech giant Meitu was one of the companies that acquired bitcoin as a cash reserve.
While the market is down, the tech giant is suffering a loss in value. It is a type of loss where the value of an asset falls below the book value of the investment.
Bitcoin lost more than 50% of its value in Q2 2022, BTC’s worst quarterly performance since Q3 2011. BTC’s decline in value is devastatingly affecting many of its investors.
Meitu lost nearly half of its crypto holding valuation as the bear market emerged this year. However, the tech firm made headlines in April 2021 after would have the purchase of approximately $100 million worth of crypto holdings.
Meitu Crypto Stake Breakdown
A local media disclosed Statement from Meitu on his stake in BTC. According to the report, the company lost over 300 million yuan, worth around $43,400 million, in crypto investments.
Recall that Meitu revealed that his crypto holdings were around 940 BTC and 31,000 ETH during an exchange deposit in July. The respective token purchase amount is $49.5 million and $50.5 million. This brought the company’s net crypto investment to $100 million.
However, the company lost almost half of the investment value in the second quarter of 2022 due to the recent decline in the crypto market. Additionally, the financial filing revealed that the impairment was more than double from last quarter, as previously expected by Meitu.
Additionally, the company said that losing the value of crypto assets would have more drastic effects on its performance. As a result, this could lead to a net loss for the company in its second quarter report of the year.
MicroStrategy, Tesla and others suffered losses
Besides Meitu, other prominent companies have suffered remarkable losses through crypto investments. For example, MicroStrategy, the leading public company that invests in Bitcoin, also reported an impairment loss. The company reported a loss of over $900 million on BTC holdings in the second quarter of 2022.
At the height of last year’s bull run, Microstrategy, led by Michael Salor, used Bitcoin as a cash reserve. This decision allowed Bitcoin to gain popularity against the US dollar. The idea became very appealing when Bitcoin climbed a whole new height of time each month.
Companies like SpaceX, Telsa and dozens of others have joined the trend. However, the bubbles burst with the arrival of the bear market as the price of BTC fell. As a result, Bitcoin fell from the high and is now trading at a third of the previous high.
Featured image from Pixabay, chart from TradingView.com
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