Meitu Gains from Bitcoin Investment but CEO Admits It Brought Too Much Trouble
Meitu Inc. has recently liquidated its cryptocurrency holdings and shifted its focus back to core business development in AI, despite having profited from its Bitcoin investments. CEO Wu Xinhong candidly expressed that the troubles from this investment outweighed the actual gains.
(Background: “Investing in BTC and ETH led to huge losses? Meitu: Considering selling tokens, optimistic about AI as a new growth driver”)
(Background Information: Dialogue with Industry Leaders — Meitu’s Cai Wensheng, Dragonfly’s Feng Bo, and Alibaba’s Zeng Ming: Evolution from Web1 to Web3)
Meitu’s Cryptocurrency Investment Strategy Under Scrutiny
Hong Kong-listed Meitu Inc. has garnered significant market attention for its cryptocurrency investment strategy. The company realized approximately 571 million RMB in net profit through trading Bitcoin. However, co-founder and CEO Wu Xinhong recently stated that the troubles stemming from this investment far outweighed the material benefits, prompting the company to decide to liquidate its holdings and refocus its strategic priorities.
Holding Cryptocurrency Is “Very Troublesome”
During the cryptocurrency market boom in 2021, Meitu invested around 100 million USD to purchase 940 Bitcoins and 31,000 Ethereums in March and April, becoming one of the few publicly listed companies in Hong Kong to incorporate cryptocurrencies into its asset allocation. This move sparked considerable market discussion. At the time, company management indicated that purchasing cryptocurrencies was an exploration for value storage and potential business integration. However, this forward-looking investment strategy brought unforeseen challenges along with paper profits.
In a recent public statement, Wu revealed the complexities of his feelings:
“We purchased cryptocurrencies purely as an investment, and we made 571 million RMB when we decided to sell at the end of last year. Although this investment brought considerable profits to the company, it also introduced many unexpected troubles and distractions.”
These “troubles” are believed to include the management effort spent addressing the extreme volatility of the cryptocurrency market, investor concerns over the company’s strategic focus, and potential compliance pressures associated with holding substantial crypto assets in a relatively unclear regulatory environment at that time. For a company focused on image processing and social platforms, the investment nature of cryptocurrencies is not closely related to its core business, and excessive involvement could detract from the company’s resources and hinder the development of its core competitiveness.
Massive Surge After Liquidation
In late 2023 to early 2024, Meitu chose to liquidate all its cryptocurrency holdings when Bitcoin prices were nearing a peak, successfully cashing out approximately 180 million USD and achieving nearly 80 million USD (about 571 million RMB) in net profits, undeniably marking a successful trading operation. However, shortly after Meitu completed its liquidation, the cryptocurrency market experienced a new wave of surging prices. By early 2025, Bitcoin prices continued to rise, briefly surpassing the $100,000 mark, reaching a peak of about $105,200. Market analysts estimate that had Meitu chosen to continue holding these crypto assets, its market value would have far exceeded the sale level, potentially missing out on over 30% of additional potential gains.
According to Bloomberg Terminal data, after Meitu’s liquidation, global institutional investors showed increased interest in cryptocurrencies. For instance, the Japanese listed company Metaplanet continued to increase its Bitcoin holdings, positioning it as a primary financial reserve asset. Additionally, following favorable policy signals from former U.S. President Trump regarding cryptocurrencies, some sovereign wealth funds also began to experiment with incorporating Bitcoin into their asset allocations, collectively driving market demand and intensifying Meitu’s regret over the missed price increases.
Investment in AI: Alliance with Alibaba
Confronted with the volatile cryptocurrency market and potential “fear of missing out” (FOMO), Meitu has demonstrated clear strategic resolve, opting to refocus on its core business areas cultivated over many years. On May 21, 2025, Meitu announced a significant strategic partnership with Chinese tech giant Alibaba. This collaboration encompasses several cutting-edge fields, including e-commerce, AI technology, and cloud computing capabilities.
Under the agreement, Meitu will issue convertible bonds worth a total of 250 million USD to Alibaba. These bonds have a three-year term, a coupon rate of 1%, and a conversion price set at 6 HKD per share. This collaboration is interpreted by the market as a strong alliance, with Alibaba’s vast ecosystem and technological prowess expected to bring new growth momentum to Meitu in areas such as AI imaging, virtual humans, and e-commerce monetization. Meitu also plans to allocate 80% of the net profits from its previous cryptocurrency sales for special dividends to reward long-term supportive shareholders.
