Sharp Slump in Bitcoin Price Issues Meitu $17.3 Million Loss
Meitu, a Chinese smartphone maker and owner of a popular photo retouching app, announced on Tuesday that it lost $17.3 million in bitcoin due to a nosedive in its value. However, the Xiamen-based company has not expressed plans to sell the cryptocurrency in the short term.
Based on their prices as of June 30th, the total value of ethereum and bitcoin purchased by the firm now stands at $65.2 million and $32.2 million, respectively. Meitu expects its bitcoin value to shrink by $17.3 million and its ethereum to reap a profit of $14.7 million.
Founded 13 years ago, Meitu has become a well-known tech company in China for its selfie photo-editing app and original smartphones.
Meitu began to buy bitcoin and ethereum in March 5 this year, acquiring around 940.89 bitcoins and 31,000 ethereums in three rounds of purchasing, paying $49.5 million and $50.5 million for the cryptocurrencies, respectively.
The smartphone and app manufacturer said in an April announcement that “cryptocurrency has enough room for appreciation, and at this time, by allocating part of its cash reserve to cryptocurrency, the risk of holding cash can be diverted. In addition, the Board of Directors believes that this can show investors the ambition and determination of the Group to embrace technological innovation, thus preparing for entering the blockchain sector”.
Cryptocurrency transactions are restricted in mainland China. On May 18th, the China Internet Finance Association, China Banking Association and China Payment and Clearing Association jointly issued an announcement to prevent the risk of speculation in virtual currency transactions, demanding that financial institutions, payment institutions and other members cease executing business involving virtual currency.
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In June, netizens reported that a large number of verified Weibo accounts with keywords of “bitcoin” and “blockchain” were banned.