Hong Kong tech large Meitu made headlines in April final 12 months after it reported almost $100 million in cryptocurrency holdings. Nonetheless, with the arrival of the bear market, the tech agency has misplaced virtually half of the valuation of its crypto holdings.
In keeping with a neighborhood media report, Meitu reported a lack of over 300 million yuan, roughly $43.4 million, on its crypto holdings. An impairment loss is a loss within the worth of an asset when it falls under the carrying worth of the funding.
Monetary filings confirmed that impairment losses have greater than doubled from the earlier quarter, one thing the agency had beforehand estimated. The tech large has stated that its crypto holdings might affect the corporate’s internet loss by the tip of the primary half of the 12 months.
In an trade submitting in July, MeToo reported crypto holdings of roughly 940 bitcoin (BTC) and 31,000 ether (ETH) had been bought for $49.5 million and $50.5 million, respectively. The corporate’s internet crypto funding was reported to be round $100 million, and because of the present downturn within the crypto market, the agency has misplaced virtually half of its funding valuation by the tip of the second quarter of 2022.
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Meitu just isn’t the one firm to undergo vital losses on its crypto investments. Microstrategy, the flag bearer of public corporations investing in bitcoin, reported a lack of greater than $900 million on its BTC holdings as of the second quarter of 2022.
On the peak of the crypto bull run final 12 months, the Michael Sayler-led microstrategy popularized using BTC as a Treasury reserve rather than a portion of the US greenback. The concept gained loads of traction as BTC was hitting new highs each month, and Tesla, SpaceX and greater than a dozen public corporations joined the bandwagon. Nonetheless, with the arrival of the bear market, the value of bitcoin fell by greater than 70% from the highest and is at present buying and selling at a 3rd of its all-time excessive.