Hong Kong-listed Chinese technology company Meitu recorded an RMB111,907,000 (approximately $17.3 million) impairment loss on its Bitcoin holdings in the first half of 2021.
The tech company, best known for its popular beauty apps, reported the loss in its latest financial results. According to Meitu’s Aug. 25 HKEX filing;
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 Ether as of June 30, 2021, in the amount of approximately RMB94.9 million was not recognized as revaluation gain.
Nevertheless, the firm hopes to bounce back if the price of Bitcoin remains bullish.
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
According to a report by BTC PEERS, the Chinese tech giant spent $40 million on Bitcoin and Ethereum in early March under the company’s “cryptocurrency investment plan” that allows it to purchase up to $100 million worth of cryptocurrencies.
The company invested an additional $50 million on March 17 on 386 BTC and 16,000 ETH.
In July, the company explained that its “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,” indicating its long-term interest in digital currencies.
Other publicly-listed companies such as MicroStrategy, Tesla, and Thai-listed financial consultancy The Brooker Group are yet to report any kind of crypto loss caused by the fall in crypto prices in the second quarter of 2021.
The crash was a result of a string of negative news, including China’s crackdown on Bitcoin mining, and Elon Musk’s tweet that Tesla would no longer accept Bitcoin for payment.
Bitcoin is currently trading at around $46,800 following a market recovery this month. The total market cap of the crypto industry has also surpassed the $2 trillion benchmark, the first time since May.