Hong Kong tech giant Meitu made headlines in April last year after it reported that it held almost $100 million worth of cryptocurrency holdings. However, with the arrival of the bear market, the tech company has lost nearly half the valuation of its cryptocurrency holdings.
According to a local media report, Meitu reported a loss in value of more than 300 million yuan, roughly $43.4 million, on its cryptocurrency holdings. An impairment loss is a loss in value of an asset when it falls below the book value of the investment.
The financial presentation has revealed that the impairment loss has doubled compared to the last quartersomething the company had previously anticipated. The tech giant has said that its cryptocurrency holdings could impact the company’s net loss by the end of the first half of the year.
In a July exchange presentation, Meitu reported cryptocurrency holdings of around 940 Bitcoin (BTC) and 31,000 Ether (ETH), bought for $49.5 million and $50.5 million respectively. The company’s net investment in cryptocurrencies was reported to be around $100 million, and the firm has lost nearly half of its investment valuations as of the end of Q2 2022, due to the ongoing cryptocurrency market crash.
Meitu is not the only company that has incurred significant losses on its cryptocurrency investments. Microstrategy, the standard-bearer for public companies investing in Bitcoin, reported an impairment loss of more than $900 million on its BTC holdings for the second quarter of 2022.
At the height of the cryptocurrency bull run last year, Microstaretgy, led by Michael Saylor, popularized the use of BTC as a treasury reserve in place of a portion of the US dollar. The idea gained a lot of traction as BTC hit a new all-time high every month, and companies like Tesla, SpaceX, and more than a dozen public companies joined the movement.. However, with the arrival of the bear market, the price of Bitcoin fell more than 70% from the maximum and is currently trading at a third of the value of its all-time high.
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