Photo software developer Meitu, listed on the Hong Kong Stock Exchange, reported a loss of $45.6 million in the first half of the year from a reassessment of its cryptocurrency reserves.

The firm expects a cumulative net loss for the period between $41.1 million and $52.3 million.

In March and April 2022, the company purchased a total of ~940.89 BTC and ~31,000 ETH. The firm spent ~$49.5 million and ~$50.5 million, respectively, to purchase digital assets.

Since the acquisition, Meitu has not sold cryptocurrencies in line with the investment strategy adopted by the board.

Despite losses from depreciation of assets as of June 30, the company’s board of directors emphasized:

• the purchase of cryptocurrencies had no significant impact on cash flows, operations, and adjusted profit/loss;
• Interim results may be reversed at the end of the year in case of a subsequent increase in the quotations of digital assets.

Meitu noted that cryptocurrencies are still at an early stage of development relative to other asset classes, and therefore prices are “prone to volatility.”

“Given that the blockchain industry is evolving rapidly and cryptocurrencies are an integral part of it, the Board believes that further adoption provides ample room for growth,” the company said in a statement.

The Board stressed that it considers the recent volatility in Bitcoin and Ethereum rates to be temporary, relying on “long-term prospects for rising prices for cryptocurrencies.”

The board also reminded investors that digital assets make up only a fraction of the company’s reserves.

According to the results of the first quarter, Meitu lost $ 2.6 million from the revaluation of the cryptocurrency.

Recall that in June, analytics software provider MicroStrategy’s “paper” losses from held bitcoins exceeded $1 billion, but at the end of the month, the company, which had 129,218 BTC, bought another 480 BTC for $10 million.

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