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Hong Kong-listed Company Meitu Declares Huge Loss Over Crypto Investment

Meitu, an Artificial Intelligence (AI) driven technological company has decried the continued fall in prices of cryptocurrencies. The Hong Kong-listed company, whose solutions are widely used in mainland China, Hong Kong, and Taiwan has declared some major losses over its cryptocurrency investment.

In a report, it is stated that as a result of buying crypto, Meitu’s net loss has grown from RMB 274.9 million to a staggering RMB 349.9 million in just the first half of 2022. In terms of percentage increase, Meitu’s losses during this period have climbed from 99.6% to 154.1 percent.

Meitu remains one of the mainstream countries that took the chance to become heavily invested in cryptocurrencies. The company’s experience ever since is recorded to be a roller-coaster, with significant swings across the profit/loss divide. However, like any other cryptocurrency investor, the recent experience has not been palatable. Significant losses have been registered across the board, as long as cryptocurrencies are concerned.

Cryptocurrency investment has a lot to do with timing and momentary price. Whatever divides a crypto investor falls into depends on when purchases were made, and the price at that time. In March 2022, Meitu released its 2021 financial report. Figures in the report reflected a contrast across the profit/loss value of the two top cryptocurrencies that the company was invested in.

Bitcoin and Ethereum have been part of Meitu’s portfolio, and at the end of 2021, while the company’s Bitcoin investment stood at a loss of RMB 28.5 million, the value of its Ethereum investment increased by RMB 425.6 million. Both investments returned a cumulative profit of 39.5% as of the end of 2021. Fast-forward to the middle of 2022, it is a different story altogether, no thanks to the persistent bear market that has seen crypto prices crash by a significant margin.

The present cryptocurrency bear market kicked off shortly after Bitcoin and several altcoins, including Ethereum, surged to new price levels in 2021. What looked like a temporary retracement after the surge has gradually developed into a full-blown bear market with major consequences for investors and cryptocurrency-related companies alike. Recently, Huobi exchange announced plans to lay off up to 30% of its workforce due to dwindling fortunes caused by the falling crypto prices. Bybit also announced plans to take similar action, and so have several other establishments in the industry.

Incidentally, events surrounding the drop in crypto prices coincided with China’s clampdown on the industry. Mining companies and exchanges, most of which were resident in China, had to relocate or shut down completely. People living in China were prohibited from engaging in cryptocurrency-related activities with severe consequences meted out to offenders.

This action from the Chinese government and regulators yanked off a major segment of the crypto market and the impact is clear. China’s anti-crypto stance may not be the only reason for the sustained decline in crypto prices, however, it cannot be said to not have played a significant role.

Meitu’s current losses in the market are significant, just like that of any investor that has stayed in the market long enough. How the market will develop in the future has been speculated in both directions. Crypto proponents insist that recovery lies somewhere in the future, while antagonists suggest that it is a bubble that has already burst beyond recovery.

The current reality is that prices are comparatively very low, and many investors are nursing significant losses as far as the crypto market is concerned.

 

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