Bitcoin recently surged past the significant milestone of $100,000 per coin, drawing global attention. Amid this rally, a notable corporate player made headlines by completely exiting its cryptocurrency holdings, securing a substantial profit in the process.
On the evening of December 4, Meitu Inc., a Hong Kong-listed company known for its photo-editing apps, announced it had sold all of its cryptocurrency assets. These included approximately 31,000 Ethereum (ETH) and 940 Bitcoin (BTC), generating combined cash proceeds of around $180 million.
The company reported a total realized gain of approximately $79.63 million (about ¥571 million RMB) from these sales. Meitu’s board proposed using about 80% of the net proceeds from these sales to pay a special dividend to shareholders. The remaining funds will be allocated to general working capital to support the expansion of its core business—imaging and design product services based on a paid subscription model.
Background of Meitu’s Cryptocurrency Strategy
Meitu first entered the cryptocurrency market in March 2021, acquiring 15,000 ETH and 379 Bitcoin in its initial purchase. The total investment amounted to roughly $40 million at the time. The company continued to buy more later that spring, ultimately holding 31,000 ETH acquired at an average cost of about $1,629 per coin and 940 BTC at an average cost of approximately $52,660 per coin.
This strategic move into digital assets was initially positioned as a diversification of its treasury assets and an exploration of emerging technology trends. However, the company also faced significant volatility along the way.
Volatility and Previous Losses
Cryptocurrency markets are known for their dramatic price swings, and Meitu’s investment was no exception. In mid-2022, the company reported substantial unrealized losses due to a market downturn, recording impairment losses of between ¥274.9 million and ¥349.9 million for the first half of the year.
This steep decline highlighted the risks of corporate cryptocurrency investments. However, the company held onto its assets through the bear market, which eventually allowed it to realize gains when market conditions improved.
Recent Bitcoin Market Performance
Bitcoin’s breakthrough to $100,000 (approximately ¥720,000 RMB) on December 5 marked a historic moment, with prices climbing 4% within a single day. Since the beginning of the year, Bitcoin has soared by 140%, with a particularly sharp rise from $68,000 to $100,000 in just one month.
This rapid appreciation has been driven by several factors, including increased institutional adoption, macroeconomic uncertainty, and growing mainstream acceptance of digital assets as a legitimate investment class.
Expert Insights and Risk Warnings
Despite the bullish trend, industry experts advise caution. Yu Jianing, Chairman of the Blockchain Committee of the China Communications Industry Association and Honorary Chairman of the Hong Kong Blockchain Association, noted that while breaking the $100,000 barrier has generated optimism, the market could be due for a short-term correction.
He emphasized that Bitcoin is a highly volatile asset class with distinct financial, technological, and industrial characteristics. Its behavior often follows cyclical patterns, meaning sharp increases can be followed by equally sharp declines.
“Investors should clearly define their investment goals and risk tolerance. Those considering digital assets should take the time to understand the underlying blockchain technology and digital financial systems to better evaluate intrinsic value and manage risk,” Yu stated.
He also warned against the use of high leverage, which can amplify losses during periods of high volatility. Diversification and a long-term perspective are essential for managing exposure to such a dynamic market.
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Meitu’s Core Business Performance
Despite the attention drawn by its crypto investments, Meitu’s primary business has also performed strongly. The company’s 2024 interim report showed adjusted net profit attributable to shareholders of ¥270 million, an increase of 80.3% year-over-year.
Its subscription-based imaging and design products have grown significantly, with paid subscribers exceeding 10.81 million—a 50.1% increase from the previous year. Revenue from this segment reached ¥930 million, accounting for 57.4% of total revenue.
This robust growth in its main business may have influenced the decision to liquidate its cryptocurrency holdings and focus more directly on core operations.
Frequently Asked Questions
Why did Meitu decide to sell all its cryptocurrency?
Meitu sold its cryptocurrency holdings to realize significant gains and return a portion of the profits to shareholders via a special dividend. The company also aims to focus more resources on growing its primary business in imaging and design software.
What is the current price of Bitcoin?
As of early December 2024, Bitcoin reached an all-time high of over $100,000. Prices are highly volatile and can change rapidly within short periods.
What are the risks of investing in Bitcoin?
Bitcoin is known for its high volatility, regulatory uncertainty, and sensitivity to market sentiment. Investors should be prepared for potential large swings in value and avoid investing more than they can afford to lose.
Is it common for companies to invest in cryptocurrency?
While still not universal, an increasing number of public and private companies are adding Bitcoin and other cryptocurrencies to their balance sheets as alternative reserve assets.
How can investors manage risk when investing in crypto?
Diversification, avoiding high leverage, understanding technology basics, and maintaining a long-term perspective are all recommended strategies for managing risk.
Where can someone learn more about blockchain technology?
Many online educational platforms, certified courses, and financial websites offer introductory and advanced materials on blockchain and digital assets.
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Conclusion
Meitu’s profitable exit from cryptocurrency underscores the potential gains—and risks—of corporate digital asset investments. While the company benefited from holding during a bull market, its experience also highlights the importance of timing, risk management, and strategic focus.
As Bitcoin continues to capture global interest, both individual and institutional investors should proceed with informed caution, balancing opportunity against inherent volatility.