On December 5th, the BTC price broke through the $100,000 mark, causing the market to once again become frenzied and full of anticipation.
However, at this moment, Meitu, which once held a large amount of Cryptocurrency, quietly left at this high point, cashing out all its BTC and ETH holdings and profiting nearly 600 million yuan by closing all positions.
Affected by this news, Meitu Corporation’s stock rose by more than 9% at one point today.
End the journey of cryptocurrency
Meitu, a Hong Kong-listed company whose main business is image and design products, has been involved in the Crypto Assets market since 2021. Against the backdrop of the pump in Crypto Assets prices at the time, Meitu decisively invested approximately $100 million to purchase a total of about 31,000 units of Ethereum and 940 units of Bitcoin.
At that time, Cai Wensheng, the then chairman of Meitu, posted in the fren circle, ‘Meitu continues to lay out the blockchain, this time buying ETH and BTCCryptocurrency as a long-term value reserve for the blockchain strategy. Someone has to be the first to eat the crab. This should be regarded as the first listed company in Hong Kong to purchase BTCCryptocurrency, and it is also the first listed company in the world to use Ether as a currency value reserve.’
Next, the cryptocurrency market experienced several ups and downs. In 2022, due to a significant decline in coin prices, Meitu had to make corresponding impairment losses and faced enormous financial pressure. However, with the recovery of cryptocurrency prices this year, Meitu’s investments have started to turn losses into gains.
Now, as the price of the currency rises, Meitu Inc. has decided to cash out and leave the market. Meitu Inc. announced last night that it has sold all of its holdings of Cryptocurrency, totaling approximately 31,000 units of Ether and 940 units of BTC, with total cash consideration of approximately 100 million US dollars and 80 million US dollars, respectively.
Through this transaction, Meitu Company made a profit of approximately $79.63 million (equivalent to about RMB 571 million). This amount exceeds the sum of Meitu Company’s net profits in 2022 and 2023, undoubtedly bringing a substantial return to the company.
According to calculations, Meitu company’s BTCHoldings has a floating profit of 86%, and Ethereum has a floating profit of 92.5%. The Return on Investment for this close all positions is nearly 90%, a return rate that is enough to make many investors envious.
By cashing out in a timely manner, Meitu not only locks in profits but also avoids potential market risks in the future. At the same time, Meitu plans to use 80% of the net proceeds from the sale to pay special dividends to shareholders as a gesture of gratitude.
The remaining proceeds from the sale, on the other hand, serve as general operating funds, bringing in substantial cash flow for the company to expand its image and design product business, which is primarily based on a subscription model.
Lantern Interactive Chairman speculates on the reasons for Meitu’s close all positions.
Today, the Hong Kong stock market’s Bitcoin concept stocks generally rose. As of the close, Meitu company pumped 6.29%, Boyaa Interactive and Blue Harbour Interactive, which still hold a large amount of BTC, pumped 22.09% and 7.69% respectively.
Regarding the reason for the close all positions of Meitu’s cryptocurrency, Wang Feng, the chairman of Linekong Interactive, responded on social media X, “How would I know, but maybe Cai Wensheng would say.”
Wang Feng speculated that, first, it should be the Maker set in advance by Meitu’s management, selling all the way to $100,000 as Meitu’s expected target. Second, the financial audit principle of Hong Kong listed companies is to use the natural fiscal year. ‘Obviously, from a financial perspective, they are very smart to do so. In fact, we also had such expectations at the beginning of the year, but after Trump was elected, the US and global encryption policies gradually strengthened. I think that in this Bull Market cycle, BTC is far more than this price. We will choose to follow the market’s holding and cashing strategy, not a one-size-fits-all approach.’
According to the mid-term report released by NetEase on September 26, 2024, the company continues to increase its investment in the third-generation internet business. In the first half of the year, it has bought 43.3396 units of Bitcoin and 848.386 units of Ethereum in the public market. As of June 30, the company holds a total of 142.8539 units of Bitcoin and 848.386 units of Ethereum, with a total cash cost of approximately 8.8 million US dollars.
Boya Interactive has also been followed by the market due to holding a huge amount of BTC. According to the announcement disclosed by Boya Interactive on November 12, as of the announcement date, the company holds 2,641 BTC, with a total cost of approximately $142 million, and an average cost of approximately $54,000 per coin; at the same time, it holds 15,445 Ether coins, with a total cost of approximately $42.5781 million, and an average cost of approximately $2,756 per coin.
Recently, Boya Interactive did not choose to reduce its BTC holdings, but instead used 14,200 ETH from November 19th to November 28th to purchase approximately 515 BTC.
Meitu’s move has also sparked speculation about the future trend of Cryptocurrency in the market. Some analysts believe that with the departure of major players, the Cryptocurrency market may face a round of adjustment and reshuffling.
Other companies or institutions holding a large amount of Crypto Assets may also follow the example of Meitu Company, choosing to cash out at this time, which means that a large dumping will cause the price of Crypto Assets to fall, further exacerbating market instability.
Peter Schiff, a Wall Street giant who successfully predicted the 2008 financial crisis, believes that most ‘whales’ (large BTC holders) who made significant donations to Trump’s campaign have already sold enough BTC during the Rebound period after the BTC election to completely recoup their investment. They know that the talk of BTC reserves is just hype, but it’s exactly what they need to cash out.
He said today, ironically, the reason why Bitcoin can reach $100,000 is actually achieved by buying politicians and colluding with the government. Without the expected government intervention, this milestone would be impossible to achieve. Goals that cannot be achieved in a free market are ultimately achieved through the power of the state.
Source: Science and Technology Innovation Board Daily
Author: Science and Technology Innovation Board Daily
