- Meitu recorded an impairment loss on its crypto assets of nearly 300 million yuan.
- The IT company’s crypto assets have lost over half of their value.
- Microstrategy also recorded an impairment loss of more than $900 million on their BTC assets.
Meitu, a prominent Hong Kong software company, recorded an impairment loss on its cryptocurrency assets of nearly 300 million yuan, or $43.4 million, according to a Chinese report. An asset has an impairment loss when its value declines below the investment’s carrying value.
The impairment loss has more than quadrupled from the previous quarter, which the company had previously expected, according to the financial report.
Meitu made news in April last year after disclosing ownership of roughly $100 million in cryptocurrencies. But since the bear market started, the IT company’s cryptocurrency assets have lost over half their value.
Meitu declared holdings in cryptocurrencies of around 940 Bitcoin (BTC) and 31,000 Ether (ETH), bought for $49.5 million and $50.5 million, respectively, in a July exchange filing. The company reported having a net crypto investment of roughly $100 million.
Although in yesterday’s report, the Company announced an operating income of 972 million yuan in the first half of the year, an increase of 20.5%, with a net loss was 266 million yuan, compared to a loss of 129 million yuan in the year-ago quarter.
Meitu is not the only business that suffered substantial losses on cryptocurrency investments. By the second quarter of 2022, Microstrategy, the leader among publicly traded companies investing in Bitcoin, recorded an impairment loss on their BTC assets of more than $900 million.
At the height of the cryptocurrency bull run in 2017, Michael Saylor’s Microstrategy popularized the usage of BTC as a treasury reserve in place of specific US dollars. As BTC continued to reach new all-time highs each month, more than a dozen publicly traded corporations, including Tesla and SpaceX, jumped on board.
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