23 February, 2024

Meitu Suffers Millions of Dollars in Crypto Losses Amidst Crypto Winter

1 year ago

12 Dec, 2023

Meitu reportedly suffered an impairment loss on their cryptocurrency assets of more than 300 million yuan, which is equivalent to around $43.4 million, as stated in a report published by a Chinese local media outlet known as The Paper. When the value of an asset decreases to the point that it is less than the investment’s carrying value, this is known as an impairment loss.

In a July statement, Meitu disclosed ownership of 940 Bitcoin (BTC) and 31,000 Ether (ETH), acquired for a total of $49.5 million and $50.5 million. At the conclusion of the second quarter of 2022, the company had lost about half of the value of its investment, which had been valued at around $100 million, due to the present decline in the crypto market.

Meitu’s operational income was $140.8 million in the first half of the year, representing a year-on-year growth of 20.5%; its net loss was $38.5 million, as opposed to a loss of $18.6 million in the same period of the previous year; and its adjusted net profit climbed by 7.9% year-on-year to $5.2 million.

Furthermore, Meitu’s loss due to the impairment of cryptocurrencies was as high as $44.2 million, as shown by the financial report, which is a significant increase from the loss of $16.2 million during the same time period in the previous year.

The number of monthly active users, however, has increased, reaching 240 million in June, up 4.5% from December of last year. Additionally, the VIP subscription has grown to become the largest source of revenue, generating nearly $50 million in the first half of this year, up 61.4% from the same period last year.