Crypto Quill

Meitu, the Chinese selfie app operator listed in Hong Kong, has sold all of its cryptocurrency holdings, netting a substantial profit of nearly US$80 million just before Bitcoin’s price surged past US$100,000. The sale marks the end of Meitu’s involvement in the volatile crypto market, with the company capitalizing on a historic rally that followed the re-election of former US president Donald Trump.

Meitu’s Crypto Investment Journey

Meitu, known for its popular photo and video editing apps, made headlines in 2021 when it disclosed a sizable investment in cryptocurrencies. The company purchased nearly US$100 million worth of Bitcoin and Ether, the two largest cryptocurrencies by market capitalization, in March and April of 2021. However, despite experiencing significant market fluctuations, Meitu’s crypto holdings have now paid off handsomely.

As of December 4, 2024, Meitu had sold its entire portfolio of cryptocurrencies, which included 940 bitcoins and 31,000 ethers, making a US$79.63 million profit. The company had begun selling its crypto assets last month, with the total value of its sales reaching nearly US$180 million.

Timing the Market: Cashing In Before Bitcoin’s Surge

The timing of Meitu’s decision to exit the crypto market was particularly advantageous. The company’s sale occurred just ahead of Bitcoin’s surge, as the cryptocurrency reached US$100,000 for the first time in history on December 5, 2024. The bullish trend was spurred by Donald Trump’s re-election and his crypto-friendly policies, such as his proposal to create a Bitcoin reserve, which has fueled investor enthusiasm.

• Profit from sale: US$79.63 million from Bitcoin and Ether sales
• Total value of crypto holdings sold: Nearly US$180 million
• Key catalysts: Trump’s re-election and crypto-friendly rhetoric

Financial Impact and Future Plans

Meitu plans to allocate 80% of its crypto investment gains to a special cash dividend for shareholders, which is expected to be paid out in June or July 2025. The remaining proceeds will be used as working capital as Meitu refocuses on its core business of developing photo, video, and design products.

While Meitu’s past attempts to monetize its selfie app, including the production of niche smartphones and its push into social media, have faced challenges, the company’s recent integration of artificial intelligence (AI) tools into its apps has significantly boosted its financial performance. In fact, Meitu reported a 233% year-on-year profit surge in 2023, driven largely by AI-driven innovation in its apps.

Challenges in Meitu’s Crypto Journey

Meitu’s journey in the crypto market has been a rollercoaster ride, marked by extreme volatility. In July 2022, the company had warned investors of potential losses of up to 154% during a period of significant market turmoil. Despite this, Meitu’s decision to exit the market with a profit showcases the company’s ability to make strategic moves in uncertain conditions.

Stock Market Performance

Following the announcement of its crypto exit, Meitu’s shares rose by 3.15%, trading at HK$2.95 (approximately 40 US cents). Despite the recent uptick, the company’s shares are still down 65% from their listing price in 2016, highlighting the struggles the company has faced in monetizing its app portfolio.