Chinese tech company Meitu, which made several investments in the two largest cryptocurrencies between March and April of 2021, revealed its impairment loss on Bitcoin holdings in a recent interim results announcements.
The Hong Kong Stock Exchange-listed photo editing company holds millions of dollars worth of Bitcoin (BTC) and Ethereum (ETH) as part of its treasury funds.
Win some, lose some
The company has purchased cryptocurrencies totaling roughly $100 million during the six months ended June 30, 2021.
As of June 30, Meitu’s Bitcoin holdings amounted to $32,2 million and its Ethereum holdings amounted to $65.2 million, recording an overall $2,6 million decrease from the company’s initial investment.
The investment consisted of 31,000 Ethereum at aggregate cash considerations of $49,484,000 and roughly 940 Bitcoin at aggregate cash considerations of $50,516,000.
“The decrease in fair value of the acquired Bitcoin as of June 30, 2021, in the amount of approximately RMB111,9 million was recognized as impairment, while the increase in fair value of the acquired Ethereum as of June 30, 2021, in the amount of approximately RMB94,9 million was not recognized as revaluation gain,” read the company’s interim report for the first half of the year, revealing that Meitu recorded $17,3 million loss on its Bitcoin holdings, while its Ethereum investment gained $14,7 million.
“Notwithstanding the foregoing, the impairment in relation to the acquired Bitcoin as of June 30, 2021, is reversible (whether in whole or in part) in the Group’s upcoming annual results for the year ending December 31, 2021, should there be a subsequent increase in the fair value of the Acquired Bitcoin as of the end date of the financial year,” read the report, indicating that Meitu doesn’t plan to sell its crypto any time soon.
The company disclosed earlier in July that it has no plans on selling its crypto holdings and elaborated that “the Board believes that the blockchain industry is still in its early stage and that cryptocurrencies have ample room for appreciation in value over the long-term.”
Bitcoin saw its all-time high on April 14, when its price hit $65,000 but was trending at $35,000 on June 30.
Judging by the crypto’s recent recovery, with its price witnessing a 25,81% increase during the past 30 days, Meitu’s upcoming annual results could be singing a different song, indeed.