Chinese technology company Meitu announced on July 3 at the Hong Kong Stock Exchange that it expected to record a net loss of 274.9 million yuan to 349.9 million yuan ($41.1 million – $52.3 million) for the six months ending June 30, 2022, up 99.6% to 154.1% compared to a net loss of approximately 137.7 million yuan for the same period last year. The firm said this is mainly due to the imbalance of purchased cryptocurrencies.
Meitu’s statement shows that since March 2021, it has announced the purchase of a total of approximately 31,000 units of Ethereum and approximately 940.89 units of Bitcoin for a total consideration of approximately $50.5 million and $49.5 million, respectively.
The firm also said that under IFRS, it estimated a loss of approximately $18.5 million (124 million yuan) and approximately $27.1 million (182 million yuan) respectively on the purchase of Ethereum and Bitcoin, for a total of approximately $46.5 million (312 million yuan).
Cryptocurrencies have recently seen a major plunge, with Wind data showing that the world’s largest cryptocurrency, Bitcoin, has lost 59.62% of its market value so far this year and is currently quoted at just $19,184 apiece.
Ethereum, the second largest cryptocurrency that Meitu is heavily invested in, has also suffered heavy losses, falling from a price of around $3,700 at the beginning of the year to its current level of around $1,000 – a decline that even exceeds that of Bitcoin.
Meitu is not the only listed company that has suffered heavy losses due to investing in cryptocurrency. On July 4, according to the Daily Telegraph, Tesla is expected to report about $440 million in Bitcoin impairment losses in its forthcoming second quarter financial report, equivalent to 9% of Tesla annual profit last year.
Since its record high of $3 trillion in 2021, the market value of the whole cryptocurrency field has reportedly shrunk by $2 trillion.