Since September this year, Bitcoin prices have surged dramatically, even surpassing $100,000 per coin on December 5th.
Meitu Corporation took advantage of this bullish market by selling all its cryptocurrency holdings between November and December 2024, realizing a profit of approximately $79.63 million (about ¥571 million).
Meitu's Cryptocurrency Investment Journey
While many companies have ventured into cryptocurrency trading, few like Meitu — whose core business has little to do with digital assets — have managed to profit significantly from such investments.
Initial Challenges and Losses
Meitu's cryptocurrency journey began in 2021 when it invested around $100 million in Bitcoin and Ethereum. However, the company soon faced market downturns due to:
- Regulatory crackdowns
- Elon Musk's critical comments about Bitcoin
- Market volatility that saw Bitcoin fluctuate between $30,000-$60,000
By 2022, Meitu reported net losses of ¥274.9-349.9 million, primarily due to cryptocurrency depreciation.
Expert Warnings About Risks
Chinese economists cautioned about several risks:
- Cryptocurrency trading remains illegal in China
- "Gray area" activities like using VPNs to trade carry legal uncertainties
- Overfocusing on cryptocurrency speculation could divert attention from core business development
Meitu's History of Business Diversification
Before cryptocurrency, Meitu experimented with various ventures leveraging its massive user base from MeituXiuxiu:
Smartphone Venture (2017-2018)
- Peaked at 1.57 million units sold (¥3.7 billion revenue)
- Eventually lost ¥500 million and exited the market
Other Failed Ventures
- Social app "Flash Chat"
- Short video platform "Meipai"
- Gaming investments
- E-commerce platforms
Current Business Focus
Since 2019, Meitu has refocused on:
Primary Revenue Streams
- Online Advertising (¥410 million H1 2024, +18.3% YoY)
- Subscription Services (Nearly 60% of revenue)
AI Technology Investments
Meitu has heavily invested in AI capabilities:
- 2013: Began AI research
- 2022: Integrated AI into core apps
- 2023: Launched proprietary Qixiang AI model
Current AI features include:
👉 Advanced photo editing tools
- Background removal
- Text elimination
- Body reshaping
- Intelligent beautification
Challenges and Competition
Despite progress, Meitu faces several challenges:
Technical Limitations
- Limited "text-to-image" generation capabilities
- Inaccurate AI outputs reported by users
User Complaints
- Automatic membership renewals
- Restricted access to personal facial data
Market Competition
- Emerging AI tools like Stable Diffusion and Midjourney
- Declining monthly active users for core apps
Future Outlook
Meitu plans to:
- Allocate 80% of cryptocurrency profits as special dividends
- Reinvest remaining funds into core imaging and design products
- Expand internationally (32.9% of users now overseas)
Develop B2B solutions for:
- Medical aesthetics
- E-commerce advertising
- Gaming industry
FAQ
Q: Why did Meitu sell all its cryptocurrency holdings?
A: The company likely recognized peak market conditions and sought to secure profits while reducing risk exposure.
Q: What percentage of revenue comes from subscriptions?
A: Subscription services contribute nearly 60% of Meitu's total revenue as of H1 2024.
Q: How has AI impacted Meitu's business?
A: AI features drive 81% of membership growth and have become central to product offerings.
Q: What are Meitu's main challenges?
A: Intensifying competition from specialized AI tools and maintaining user growth amid technical limitations.
Q: What international markets show promise?
A: Southeast Asian countries like Indonesia and Thailand demonstrate strong growth potential.
Q: How does Meitu plan to use cryptocurrency proceeds?
A: Primarily for shareholder dividends (80%) and core business reinvestment (20%).
👉 Explore secure digital asset management
The company's leadership emphasizes focusing on core competencies rather than chasing trends, with CEO Chen Jianyi stating: "Our lesson is clear — excel at what we know best: creating world-class imaging tools powered by AI."