Not selling means not losing! Statistics on the gains and losses of holding companies, Nexon recognizes losses, Meitu: will not recognize losses and sell in the short term

The cryptocurrency market has experienced a crazy first half of the year. While the soaring prices have brought attention to institutional adoption of cryptocurrencies, with companies frequently announcing the inclusion of Bitcoin in their balance sheets, the recent sharp drop in Bitcoin prices raises questions about the financial situation of these enterprises.

Corporate Gain and Loss from Holding Cryptocurrency

Originally, including Bitcoin in the balance sheet was considered a good thing for institutions. Well-known Asian companies such as Meitu and NEXON announced their entrance into Bitcoin as the price continued to rise.

However, with the sudden drop in the market and Tesla no longer supporting Bitcoin payments, institutional gains from holding cryptocurrency have significantly shrunk, even facing the dilemma of recognizing losses in financial reports. The timing of when these large holders will exit has also become a market concern.

According to statistics from Coingecko and Bitcoin Treasuries, the gains and losses from corporate holdings of cryptocurrency are as follows. Entry costs for companies like Coinbase, Bitcoin Group SE, Riot Blockchain, Argo Blockchain, and Hive Blockchain are unknown and have been removed.

Tesla Approaching Recognition of Losses

Both Marathon Patent Group and Tesla have seen their percentage gains drop to single digits. According to U.S. Generally Accepted Accounting Principles, when the market price of Bitcoin falls below the company's purchase cost, losses need to be recognized in quarterly financial reports.

Prior to this, Musk had hinted that Tesla might sell off its Bitcoin holdings in the second quarter, but later promised that if 50% of mining is green energy, Tesla will once again use Bitcoin as a payment unit.

Based on historical dates, Tesla's Q2 financial report is expected to be released at the end of July.

Meitu: No Selling, Expected to Recognize Mid-term Losses

Meitu completed its last investment of the "$100 Million Cryptocurrency Investment Plan" on April 8, holding a total of 940.8 Bitcoins. While gains once approached $20 million, the current gains/losses stand at -36.57%.

In response, Meitu issued a "Voluntary Announcement" on July 6, stating that after completing the investment plan, it will not make further purchases or sell in the short term. According to relevant accounting standards in international financial reports, Meitu has classified cryptocurrency as intangible assets and expects to recognize impairment losses in mid-term performance.

Value changes as of June 30:

• Bitcoin: Decreased by approximately $17.3 million
• Ethereum: Increased by approximately $14.7 million

Ethereum will not be recognized as income in mid-term performance. The board also emphasized that the gains/losses from Bitcoin will not have any significant impact on cash flow or operations.

Nexon: Recognizing Losses

Well-known South Korean online gaming company Nexon purchased 1,717 Bitcoins for $100 million on April 27, at an average price of $58,226, currently facing a loss of -43%.

Nexon announced in a statement that the financial performance for the second quarter will recognize a loss of 4.499 billion Japanese Yen ($40.94 million) as extraordinary expenses, and will re-evaluate in September next quarter.

The second quarter has passed, indicating that financial reports from various companies will be released successively. The movements of companies like Tesla and Square are definitely the most anticipated, while MicroStrategy, holding the most cryptocurrency, plans to sell $1 billion in stocks and reinvest in Bitcoin.

As for Meitu and Nexon showing losses on the books, from the official statements released, it seems that there are currently no plans to stop-loss and sell.