On the evening of December 4, Meitu Inc. (1357.HK) announced on the Hong Kong Stock Exchange that it had begun selling its cryptocurrency holdings starting in November 2024. By December 4, the company had fully divested its entire portfolio, consisting of approximately 31,000 units of Ethereum and 940 units of Bitcoin. The total cash proceeds from these sales amounted to about $180 million, resulting in a profit of approximately $79.63 million (around RMB 571 million).
Meitu’s Board of Directors proposed allocating about 80% of the net proceeds from the sale to fund a special dividend. The company plans to recommend a special cash dividend of approximately HK$0.109 per share. The remaining net profit will be used as general working capital to support the development of Meitu’s imaging and design product business, which operates primarily on a paid subscription model.
Background of Meitu’s Cryptocurrency Investments
Meitu initially began acquiring virtual currencies in the first quarter of 2021. On March 5 of that year, the company announced the purchase of $22.1 million worth of Ethereum and $17.9 million worth of Bitcoin in public market transactions. Just twelve days later, on March 17, Meitu disclosed another acquisition: $28.4 million in Ethereum and $21.6 million in Bitcoin. An additional purchase followed on April 8.
In total, Meitu accumulated roughly 31,000 Ether and 940.89 Bitcoin, with a total investment of $50.5 million in Ethereum and $49.5 million in Bitcoin—bringing the overall cost to $100 million. This translates to an average purchase price of $52,610 per Bitcoin and $1,629 per Ether.
Business Performance and Strategic Shift
According to Meitu’s financial report for the first half of 2024, the company achieved an adjusted net profit attributable to equity holders of RMB 270 million as of June 30—an 80.3% year-over-year increase. The number of paid subscribers surpassed 10.81 million, growing by 50.1% compared to the previous year. Revenue from the imaging and design product segment, which is mainly subscription-based, reached RMB 930 million, a 54.5% increase, accounting for 57.4% of total revenue.
Following the announcement of the cryptocurrency divestment, Meitu’s stock price rose 6.29% on December 5, closing at HK$3.04 per share.
Bitcoin Breaks $100,000 Barrier
In related market news, the price of Bitcoin surged past the $100,000 mark on the morning of December 5, climbing 4% within a single day and setting a new all-time high. Since the beginning of the year, Bitcoin has seen a cumulative increase of 138%. Notably, it took just one month for the cryptocurrency to jump from $68,000 on November 4 to $100,000.
Regulatory and Market Perspectives
During the DealBook/Summit conference hosted by The New York Times on December 4, U.S. Federal Reserve Chair Jerome Powell shared his views on cryptocurrency and the potential for a U.S. national Bitcoin reserve. Powell emphasized that Bitcoin is a competitor to gold, not the U.S. dollar. He described Bitcoin as a virtual asset similar to gold, noting that its high volatility makes it unsuitable as a mainstream payment method or store of value. Therefore, he asserted, Bitcoin does not compete with the dollar but rather with gold.
Despite Bitcoin’s impressive price surge, experts caution that significant risks remain. Yu Jianing, Co-Chair of the Blockchain Committee of the China Communications Industry Association and Honorary Chairman of the Hong Kong Blockchain Association, pointed out that the combination of high volatility and high leverage is one of the most prominent risk factors in the crypto market. During periods of bullish sentiment, investors often turn to high-leverage tools seeking greater returns. However, if market conditions reverse abruptly, these leveraged positions can quickly accumulate risk, triggering panic and large-scale liquidation events.
Zhao Wei, a Senior Researcher at the OKX Research Institute, noted that while Bitcoin’s upward momentum is strong, its ability to sustain these levels depends on how quickly investors digest positive news and how monetary and regulatory policies evolve in major developed economies. In the short term, Bitcoin may experience sharp adjustments and heightened volatility, making the outlook uncertain.
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Frequently Asked Questions
Why did Meitu decide to sell its cryptocurrency holdings?
Meitu sold its cryptocurrency assets to realize substantial investment gains and allocate a significant portion of the proceeds to shareholders as a special dividend. The remaining funds will support the company’s core subscription-based imaging and design products.
What was the total profit Meitu made from selling Bitcoin and Ethereum?
The company reported a total profit of approximately $79.63 million (RMB 571 million) from the sale of its entire cryptocurrency portfolio.
How has Bitcoin’s price performed recently?
Bitcoin reached a historic milestone by surpassing $100,000 on December 5, marking a 138% increase since the beginning of the year. The asset surged from $68,000 to $100,000 in just one month.
What are the main risks associated with Bitcoin investing?
Key risks include extreme price volatility, the use of high leverage leading to liquidations, regulatory changes, and shifts in monetary policy within major economies that can impact market sentiment.
How does Jerome Powell view Bitcoin?
The Federal Reserve Chair compares Bitcoin to gold, considering it a speculative virtual asset rather than a practical currency. He believes Bitcoin competes with gold as a store of value and not with the U.S. dollar.
What is Meitu’s core business focus now?
Meitu is concentrating on growing its imaging and design product offerings through a paid subscription model, which has shown strong revenue growth and increasing user adoption.