In a revealing update from its latest financial report, Meitu Company (1357.HK) disclosed significant fluctuations in its cryptocurrency portfolio during the first half of the year. Released on August 25, the company’s interim report showed total revenue of RMB 806 million, alongside a net loss of RMB 128.7 million. A major contributing factor to this loss was the impairment of its digital asset investments—particularly Bitcoin.
Meitu classifies its cryptocurrency holdings as intangible assets on its balance sheet. As of June 30, 2021, the fair value of its Ethereum and Bitcoin holdings stood at $65.2 million and $32.2 million respectively. However, during this period, the Bitcoin investment suffered an impairment loss of RMB 111.9 million, while Ethereum’s valuation increased by RMB 94.9 million. Overall, the company recorded a net unrealized loss of RMB 17 million from its crypto investments in the first half.
Strategic Crypto Purchases at Key Market Points
Meitu began actively investing in cryptocurrencies in early 2021, making three major purchases of Bitcoin and Ethereum through public market transactions. From March 7 onward, the company executed a series of high-profile acquisitions:
- On March 5, Meitu bought approximately 15,000 units of Ethereum and 379.12 BTC for about $22.1 million and $17.9 million respectively—totaling roughly RMB 140 million and RMB 110 million. The average purchase price for Bitcoin in this round was around $47,000.
- On March 17, its subsidiary Miracle Vision acquired an additional 16,000 ETH at a cost of $28.4 million and 386.08 BTC for $21.6 million, bringing the average Bitcoin price to approximately $55,900.
- By April 8, Meitu Hong Kong purchased another 175.67 BTC for $10 million, pushing the average entry price for its total Bitcoin holdings to about $56,900 per coin.
In total, Meitu invested nearly $100 million in cryptocurrencies under a board-approved investment strategy that allowed for up to $100 million in digital asset acquisitions.
Market Volatility Impacts Valuation
Despite strong initial momentum in early 2021, Bitcoin's price dropped significantly by mid-year. At the reporting date of June 30, BTC was trading around $35,000—well below Meitu’s average acquisition cost of over $52,000. This gap led to the substantial impairment charge on its Bitcoin holdings.
Conversely, Ethereum performed strongly during the same period. While purchased at an average price near $1,629, ETH climbed to approximately $2,100 by June 30—resulting in a paper gain of RMB 94.9 million. As of the latest market data (with ETH hovering near $3,100), the unrealized value of Meitu’s Ethereum position has grown even further, potentially reaching a valuation of RMB 620 million.
This divergence highlights the dual nature of crypto investing: high risk paired with high reward potential depending on timing and asset selection.
Meitu’s Broader Blockchain Involvement
While this recent investment drew widespread attention, Meitu’s involvement in blockchain technology predates its direct crypto purchases. The company has previously invested in blockchain startups and explored decentralized applications.
At one point, BEC (Beauty Chain), a now-defunct blockchain project, was mistakenly associated with Meitu due to branding similarities. However, Meitu Chairman蔡文胜 (Cai Wensheng) publicly clarified that the company had no official affiliation with BEC or its controversial ICO (Initial Coin Offering) campaign.
That said,蔡文胜 personally has been deeply involved in the crypto space. He is a known investor in OKX (formerly OKEx), one of the world’s largest cryptocurrency exchanges. His venture capital firm, Longling Investment, has also backed several blockchain ventures including FCoin—a once-popular but later troubled trading platform.
It’s important to note that while蔡文胜 supports various blockchain initiatives, not all claims linking him or Meitu to specific projects are accurate. For example, MXC (Mexc Global) has denied receiving any investment from蔡文胜.
Why Corporate Crypto Investment Matters
Meitu’s case offers valuable insights into how traditional tech firms are beginning to treat digital assets as part of their treasury management strategies—similar to Tesla and MicroStrategy.
However, unlike companies that hold Bitcoin as a long-term store of value, Meitu's diversified approach includes Ethereum, which reflects confidence in smart contract platforms and decentralized finance (DeFi) ecosystems.
Still, accounting standards play a critical role here. Because Meitu records crypto as intangible assets under Hong Kong GAAP, any decline in fair value must be written down immediately—but gains can only be recognized upon disposal. This creates asymmetric reporting: losses hurt earnings right away, while profits remain unrealized until sale.
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Frequently Asked Questions (FAQ)
Q: How much did Meitu lose on its Bitcoin investment?
A: Meitu recorded an impairment loss of RMB 111.9 million on its Bitcoin holdings due to declining market prices in the first half of 2021.
Q: What was Meitu’s average purchase price for Bitcoin?
A: Across multiple purchases from March to April 2021, Meitu bought Bitcoin at an average price of approximately $52,000 per coin.
Q: Did Meitu profit from Ethereum?
A: Yes. Despite market swings, Ethereum appreciated from an average purchase price of $1,629 to over $2,100 by June 30, generating a paper gain of RMB 94.9 million.
Q: Is Meitu still holding its cryptocurrency?
A: As per disclosures up to June 30, Meitu had not sold any portion of its BTC or ETH holdings. The assets remain on its balance sheet as long-term intangible investments.
Q: Was BEC (Beauty Chain) a Meitu project?
A: No. Although there were public misconceptions due to branding similarities, Meitu officially denied any connection with the BEC blockchain project or its ICO.
Q: Who is蔡文胜 and what is his role in crypto?
A:蔡文胜 is Meitu’s chairman and a prominent angel investor in China’s tech scene. He has backed several blockchain ventures and is an early investor in OKX.
Looking Ahead: Lessons from Meitu’s Strategy
Meitu’s foray into crypto marks a bold step toward digital transformation in corporate finance. While short-term volatility led to accounting losses, the long-term strategic intent appears focused on diversification and exposure to blockchain innovation.
For investors and analysts, this move underscores growing institutional interest in digital assets—not just as speculative instruments but as part of broader technological positioning.
As market conditions evolve and regulatory clarity improves, more companies may follow suit—adopting balanced portfolios that include both Bitcoin and programmable assets like Ethereum.
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