Meitu Takes $17.3 Million Hit on Its Bitcoin Holdings

Meitu, a leading Asian technology firm, recently revealed that the fair value of its Bitcoin holdings has decreased by approximately $17.3 million. The company added that the recent decline in value will be recognized as impairment loss in the Interim Results.

Contrasting to its Bitcoin holdings, the company reported an increase of $14.7 million in the fair value of its Ethereum holdings. Earlier this year, the technology firm purchased nearly $100 million worth of Bitcoin and Ethereum.

In the first week of March 2021, Meitu announced the purchase of 15,000 Ethereum and 379 Bitcoin for a total of $40 million. On 17 March, the Asian firm accelerated its BTC and ETH accumulation with the addition of 16,000 Ethereum and 386 Bitcoin.

“Since the Cryptocurrencies Acquisitions, the Group has neither acquired nor sold any cryptocurrencies pursuant to the Cryptocurrency Investment Plan (including any Ether or Bitcoin). As disclosed in the announcements, 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. As such, there are currently no plans to sell the same in the near future. The acquired Cryptocurrencies would be accounted as intangible assets under the cost model in the Group’s upcoming interim results for the 6 months ended June 30, 2021,” Meitu mentioned in an official announcement.

Bitcoin’s Price Action

The world’s largest cryptocurrency has lost nearly 40% of its value since March 2021. Bitcoin touched an all-time high of over $64,000 in April 2021 and since then, the digital asset has been in a downtrend. In June, BTC dropped below $30,000.

Commenting on the latest price action of Bitcoin, Peter Schiff, Chief Economist and Global Strategist at Euro Pacific Capital, said: “Bitcoin continues to carve out the right shoulder of an ominous head and shoulders top pattern. If Bitcoin takes out the June low, the market could easily collapse below $10K, especially if leveraged speculators are forced to sell. No one seems to acknowledge this possibility.”