Tech giant Meitu loses over $43M of its crypto investment in bear market

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Hong Kong tech large Meitu made headlines in April final yr after it reported almost $100 million in crypto holdings. Nonetheless, with the appearance 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, roughly $43.4 million, on their crypto holdings. An impairment loss is a loss in worth of an asset when it falls under 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 earlier. The tech large has said that its crypto holdings may affect 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 net crypto investment of the company was reported at 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.

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Meitu shouldn’t be the one firm to incur important losses on its crypto investments. Microstrategy, the flag bearer of public firms investing in Bitcoin, reported an impairment loss of over $900 million on their BTC holdings by the second quarter of 2022.

On the peak of the crypto bull run final yr, Michael Saylor-led Microstaretgy popularized using BTC as a treasury reserve changing a portion of the U.S. greenback. The concept gained a number 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. Nonetheless, with the appearance of the bear market, Bitcoin value fell by over 70% from the highest and presently buying and selling at one-third the worth of its all-tim excessive.