Meitu Loses More Than $43M In Crypto Investments Amid Bear Market
05 September 2022 - 9:52PM
NEWSBTC
During the crypto bull run last year, Bitcoin hit the $50,000 mark
for the first time and exceeded many expectations. As a result,
several investors purchased bitcoin at that time. The Hong Kong
Tech giant Meitu was one of the companies that acquired bitcoin as
a treasury reserve. As the market hit a decline, the tech giant
suffers impairment loss. This is a type of loss where the value of
an asset falls below the investment carrying value. Related
Reading: A Date For The Mt. Gox Repayment Is Set, How Will This
Affect Bitcoin? Bitcoin has lost over 50% of its value in the
second quarter of 2022, the worst quarterly performance of BTC
since the 2011 third quarter. The decline in BTC value is
devastatingly affecting many of its investors. Meitu has lost
almost half of its crypto holding valuation in the emergence of the
bear market this year. However, the tech firm made headlines in
April 2021 after reportedly buying about 100 million dollar worth
of crypto holdings. Breakdown of Meitu’s Crypto holding A local
media disclosed Meitu’s statement over its BTC holding. According
to the report, the firm lost more than 300 million yuan, worth
approximately $43,400 million, on crypto investments. Recall that
Meitu disclosed its crypto holdings to be about 940 BTC and 31,000
ETH during a July exchange filing. The respective purchasing amount
for the tokens is $49.5 million and $50.5 million. This made the
company’s net crypto investment to be $100 million. However, the
firm lost almost half of the investment value by the second quarter
of 2022 due to the recent decline in the crypto market. In
addition, the financial filing revealed that the impairment loss
went beyond double from the last quarter, as had earlier expected
by Meitu. Also, the company said that the loss of the value of the
crypto holdings would bring more drastic effects on its
performance. As a result, it could lead to a net loss for the firm
in its report for the year’s second quarter. MicroStrategy, Tesla,
And Others Incurred Losses Besides Meitu, other prominent companies
have experienced remarkable losses through crypto investments. For
example, MicroStrategy, the leading public company that invests in
Bitcoin, has also reported an impairment loss. The company reported
over 900 million dollars worth of loss on BTC holdings by the
second quarter of 2022. During the prime of last year’s bull run,
Microstrategy, led by Michael Salor, used Bitcoin as a treasury
reserve. This move made Bitcoin gain popularity over the U.S
dollar. The idea became very attractive when Bitcoin was climbing
an all-new time height every month. Related Reading: Crypto Market
Remains Extremely Fearful As Bitcoin Struggles At $20,000 Companies
like SpaceX, Telsa, and dozens of others joined the trend. However,
the bubbles have busted with the coming of the bear market as the
BTC price dropped. As a result, Bitcoin fell from the top and is
now exchanging at one-third of the previous highest value. Featured
image from Pixabay, chart from TradingView.com
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