Hong Kong tech giant Meitu made headlines in April 2021 after it reported having $100 million in cryptocurrency holdings.
However, after the start of the bear market, the tech firm is rumored to have lost 300 million yuan ($43.4 million) on its crypto holdings.
Explained here, an impairment loss is a loss in the value of an asset when it falls below the investment value.
Following that, financial filings revealed that impairment losses had doubled from the last quarter, and the tech giant even revealed that its crypto holdings could have an impact on the company's net loss by the end of the year.
In a July exchange filing, Meitu is rumored to have crypto holdings of 940 Bitcoin (BTC) bought for $49.5 million and 31,000 Ethereum (ETH) worth $50.5 million.
Meanwhile, the crypto company's net investment is said to be $100 million, but Meitu lost half of its investment valuation by the end of the second quarter of 2022 due to the current downturn in the crypto market.
For context, Meitu isn't the only company to have a crypto investment nightmare. This is because MicroStrategy, a public company that invests in BTC, is also reported to have an impairment loss of over $900 million on its holdings in BTC.
In essence, MicroStrategy led by Michael Saylor succeeded in popularizing the use of BTC as a treasury reserve in replacing part of the US dollar last year.
Because of this, the idea gained a lot of traction after BTC hit all-time highs every month, but the price of BTC has fallen more than 70% from its peaks and is now trading at a third of the all-time highs it has reached.
