Meitu, once a household name in photo-editing apps, is now more frequently discussed for its cryptocurrency ventures than its core software. The company that brought millions of users the beloved MeituPic and MeituShow apps has found itself caught in the volatile tides of digital assets—riding high during the 2021 bull run, only to face steep losses as the crypto market crashed in 2022.
While Meitu continues to claim confidence in its long-term blockchain strategy, financial reports tell a different story: a net loss of up to RMB 349.9 million in the first half of 2022, nearly triple the previous year’s deficit, largely due to cryptocurrency write-downs. This marks a turbulent chapter for a company still struggling to define a sustainable business model beyond speculation.
From Photo Editing Pioneer to Crypto Investor
Meitu burst onto the tech scene as a trailblazer in mobile beauty applications. Its flagship app, MeituPic (MeituXiuXiu), offered easy-to-use filters and retouching tools that resonated with young users across Asia. At its peak in 2016, Meitu went public on the Hong Kong Stock Exchange—the largest internet IPO there since Tencent—and boasted over 456 million monthly active users.
But despite massive user reach, monetization remained elusive. As a utility app, Meitu faced inherent limitations: short user engagement times, limited ad inventory, and fierce competition from rising alternatives like B612 and醒图 (Xingtu). Hardware ventures like Meitu smartphones failed to gain traction due to lack of differentiation, while attempts at e-commerce and beauty services incurred heavy operational costs.
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By 2018, Meitu began pivoting toward a lighter business model—licensing its brand to Xiaomi for smartphones and pausing underperforming divisions. It wasn't until 2020 that the company reported its first annual profit of RMB 60.9 million, followed by RMB 85.07 million in 2021. On the surface, this looked like a turnaround.
However, a closer look reveals that much of this profitability was driven not by core operations, but by unrealized gains from cryptocurrency holdings.
The $100 Million Bet on Bitcoin and Ethereum
In early 2021, amid soaring crypto markets, Meitu announced a bold strategic move: investing up to $100 million in digital assets. By April, it had purchased:
- 940.885 BTC (worth $49.5 million at an average price of ~$52,600 per BTC)
- 31,000 ETH (worth $50.5 million at ~$1,629 per ETH)
These assets were recorded on Meitu’s balance sheet as long-term reserves under its blockchain strategy. The timing, however, placed Meitu squarely at the top of the market cycle.
When Bitcoin surged past $64,000 in April 2021 and Ethereum climbed above $4,800 by November, Meitu celebrated paper profits exceeding RMB 397 million—far surpassing its adjusted net profit of RMB 85.1 million for the year.
Yet the euphoria was short-lived.
By mid-2022, Bitcoin had plunged below $20,000 and Ethereum dipped into three-digit prices. According to Meitu’s July 2022 announcement, the depreciation of these holdings led to foreign exchange losses of approximately **$45.6 million (RMB 305 million)**—the primary driver behind its ballooning net loss.
Despite the losses, Meitu maintains a firm stance: no plans to sell. The company argues that price fluctuations are temporary and emphasizes that these assets are held for long-term strategic value.
The "Second Curve" That Never Took Off
Meitu has consistently promoted its VIP subscription and image SaaS services as its true growth engine—the so-called “second curve” meant to replace reliance on ads and speculative income.
In 2021 alone, this segment generated RMB 520 million, growing 146.9% year-on-year. Products like Wink, Chic, Meitu Design Room, and Meitu Cloud Repair were launched to serve both casual users and professionals in design, photography, and e-commerce.
Yet even this promising trajectory pales in comparison to the volatility introduced by crypto holdings. With ad revenue still dominant at RMB 760 million in 2021, and SaaS contributions yet to cross the halfway mark, questions remain about whether Meitu has truly diversified its revenue base.
Moreover, user numbers have declined for five consecutive years—from 456 million in 2016 to 231 million by end-2021—undermining the foundation of any scalable digital service.
Why Crypto Feels Like a Distraction
While many tech firms explore blockchain integration, Meitu stands out for placing such a large portion of its capital into unproductive assets. Unlike companies building decentralized applications or NFT marketplaces, Meitu’s investment appears purely financial—a bet on appreciation rather than innovation.
Even蔡文胜 (Cai Wensheng), Meitu’s founder and a known crypto enthusiast, admitted buying Bored Ape Yacht Club #8848 out of FOMO (“fear of missing out”), paying 187 ETH (~$560,000) for one NFT. His personal investments mirror the company’s speculative tilt.
This alignment between personal passion and corporate strategy raises concerns about governance and focus. Is Meitu evolving into a tech innovator—or merely a publicly traded crypto wallet?
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FAQ: Understanding Meitu’s Crypto Strategy
Q: Did Meitu actually lose money on its crypto investments?
A: Yes. In the first half of 2022, Meitu recognized impairment losses totaling approximately $45.6 million due to declining Bitcoin and Ethereum prices.
Q: Has Meitu sold any of its cryptocurrency?
A: No. As per official statements, Meitu has not sold any BTC or ETH since purchase and intends to hold them long-term.
Q: Does crypto affect Meitu’s daily operations?
A: According to the company, the losses are non-cash and do not impact cash flow or operational capacity.
Q: What is Meitu’s “second growth curve”?
A: It refers to subscription-based services like VIP memberships and SaaS tools (e.g., Meitu Cloud Repair), which aim to provide recurring revenue.
Q: Is Meitu still profitable?
A: While it posted net profits in 2020 and 2021, those were partly inflated by crypto valuations. In 2022, it returned to significant net losses due to market downturns.
Q: Could Meitu recover if crypto prices rebound?
A: Potentially. If Bitcoin and Ethereum rise significantly, Meitu could reverse prior impairments and report gains—but this depends on external market forces beyond its control.
Anchoring Hope in Web3?
Meitu frames its crypto holdings not as speculation but as strategic entry tickets into the metaverse—digital assets believed to underpin future virtual economies. In that sense, the $100 million may be seen less as investment and more as positioning.
But without strong product innovation or user growth, betting on macro trends won’t sustain shareholder value. Real transformation requires execution—not just ownership of volatile tokens.
As video content overtakes static images and competitors enhance AI-powered editing tools, Meitu must accelerate its core product evolution or risk becoming irrelevant—even if its balance sheet eventually recovers.
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Final Thoughts
Meitu’s journey reflects a broader challenge in the tech industry: balancing innovation with financial discipline. While exploring emerging technologies like blockchain is valid, allocating a substantial portion of corporate capital into highly speculative assets introduces unacceptable risk—especially for a company still proving its primary business model.
The dream of a metaverse-powered future is compelling, but until Meitu rebuilds user trust, grows engagement, and scales its SaaS offerings sustainably, it will remain defined not by its software legacy—but by a gamble that hasn’t paid off.
Core Keywords: Meitu, cryptocurrency investment, Bitcoin, Ethereum, metaverse strategy, digital asset impairment, SaaS growth, crypto volatility