Bitcoin surpassed many predictions last year when it crossed the $50,000 threshold during its crypto bull run. Many people bought bitcoin during that period. Meitu, a tech giant in Hong Kong, was among the first to acquire bitcoin as a reserve for Treasury.
Tech giant suffered impairment loss when the market fell. It is when an asset’s value falls below its investment value.
Bitcoin’s second quarter value has dropped by more than half. It is now the lowest quarterly performance for Bitcoin since its third quarter in 2011. BTC investors have been severely affected by the decline in its value.
Meitu lost nearly half its value in crypto holdings due to the bear market. After reportedly purchasing crypto holdings valued at 100 million dollars, Meitu made headlines in April 2021.
Breakdown of Meitu’s Crypto holding
A local media disclosed Meitu’s statement over its BTC holding. The report states that the company lost over 300 million Yuan on crypto investments, which is approximately $43,400,000,000.
Remember that Meitu revealed its crypto holdings as being approximately 940 BTC or 31,000 Ethereum during an exchange filing in July. Both the $49.5million and $50.5million purchasing amounts for tokens are respective. This made the company’s net crypto investment to be $100 million.
Due to recent falls in crypto markets, almost half the company’s investment value was lost by 2022’s second quarter. Meitu had previously predicted that impairment losses would exceed double in the second quarter.
Additionally, the company stated that any loss in crypto assets’ values would cause more serious consequences for its business performance. As a result, it could lead to a net loss for the firm in its report for the year’s second quarter.
The Losses of MicroStrategy and Tesla by Other Companies
Meitu is not the only company that has suffered extraordinary losses from crypto investments. MicroStrategy is a leading company investing in Bitcoin. It also suffered an impairment loss. By the end of the second quarter 2022, there was a loss of over 900,000,000 dollars in BTC assets.
During the prime of last year’s bull run, Microstrategy, led by Michael Salor, used Bitcoin as a treasury reserve. The move helped Bitcoin surpass the U.S. dollar. When Bitcoin was reaching an ever-new height each month, the idea of Bitcoin became extremely attractive.
SpaceX, Telsa and many other companies joined the wave. The bear market ushered in the end of bubbles as BTC prices fell. Bitcoin lost its top value and now trades at about one-third the price it was before.
Featured Image from Pixabay. Chart by TradingView.com