In a strategic financial move that marks the end of an era, Meitu has fully exited its cryptocurrency holdings, locking in a substantial profit of approximately $79.63 million—equivalent to about 571 million RMB. The decision, announced in a December 4 corporate filing, reflects a deliberate pivot away from digital assets and back toward its core business: AI-powered image and design tools.
Meitu plans to distribute around 80% of the proceeds as a special dividend to shareholders, while allocating the remaining 20%—roughly 114 million RMB—to strengthen its subscription-based product lines. This reinvestment underscores a renewed focus on sustainable growth through its flagship image and design products, aligning with broader industry shifts toward AI-driven content creation.
From Blockchain Enthusiast to Strategic Exit
Years before the mainstream adoption of Web3 and NFTs, Meitu was already exploring blockchain integration. In 2018, it released a whitepaper outlining ambitions to build a decentralized ecosystem powered by AI—a vision that drew both curiosity and skepticism. At the time, critics argued the company was straying too far from its core photo-editing roots, especially as it faced declining revenues and net losses.
Indeed, in H1 2018, Meitu reported revenue of 2.052 billion RMB, down 5.9% year-on-year, with an adjusted net loss of 199 million RMB. Its dual focus on internet services and smart hardware failed to deliver consistent profitability, prompting investors to question its long-term strategy.
The turning point came in 2021 when Meitu made headlines by investing heavily in cryptocurrencies. During that period, the company's revenue had rebounded to 806 million RMB, growing 44.6% annually. More importantly, it began breaking down its income streams into clearer segments: online advertising, premium subscriptions, in-app purchases, and internet value-added services. That same year, it posted an adjusted net profit of 20.3 million RMB—its first significant turnaround.
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According to Yu Jianing, co-chair of the China Communications Industry Association Blockchain Committee, Meitu’s entry into crypto was not speculative but strategic. “2021 was a pivotal year for digital assets going mainstream,” Yu noted. “Meitu’s move reflected a forward-looking assessment of long-term value and a cautious exploration of emerging markets.”
Timing the Market: Why Exit Now?
Digital asset markets are notoriously volatile. Institutional investors like Meitu often adopt phased exit strategies during bull runs rather than waiting for absolute peaks. As Yu explained, “When Bitcoin appreciates rapidly, correction risks increase. Given market depth and liquidity constraints, smart institutions tend to cash out gradually during uptrends.”
By fully liquidating at a high point in late 2024, Meitu demonstrated disciplined capital management. The timing coincided with growing regulatory clarity and maturing investor sentiment—factors that likely influenced the board’s decision to lock in gains before potential market cooling.
Refocusing on Core Strengths: The Rise of AIGC
Fast forward to H1 2024, Meitu’s business landscape has transformed dramatically. Revenue reached 1.621 billion RMB, up 28.6% year-on-year, with adjusted net profits soaring 102.42% to 274 million RMB. These gains were driven by four key divisions:
- Image and Design Products
- Beauty Solutions
- Advertising
- Other Services
Among these, image and design products emerged as the dominant revenue engine, increasing their share from 47.8% in H1 2023 to 57.4% in H1 2024. This growth is largely attributed to rising subscription penetration—a metric now central to Meitu’s expansion strategy.
The company has also launched its Meitu Ideal AI Model, targeting enterprise clients with generative AI capabilities such as text-to-image and image-to-image conversion. This positions Meitu directly in the fast-growing AIGC (AI-Generated Content) space.
However, challenges remain. As Wang Qinglin, research manager at Recco Institute, points out: “While Meitu benefits from strong user data and visual application scenarios, competition is intensifying. Free large-model platforms and established players like Adobe are formidable rivals.”
Wang warns of a potential “AIGC disillusionment” phase: “If Meitu’s paid AI features fail to meet customer expectations, churn could rise. Sustained innovation will be critical.”
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Strategic Reinvestment in Subscription Growth
With an estimated 114 million RMB from crypto profits funneled into product development, Meitu is doubling down on its subscription model. The goal is clear: convert casual users into paying subscribers by enhancing AI-powered editing tools, improving personalization, and expanding cross-platform functionality.
This shift mirrors broader tech trends where recurring revenue models outperform one-time sales or ad-dependent monetization. For Meitu, transitioning from a free app developer to a premium SaaS-like provider could unlock higher valuations and greater investor confidence.
Frequently Asked Questions
Q: Why did Meitu invest in cryptocurrency in the first place?
A: Meitu viewed digital assets as part of a broader blockchain strategy aimed at future-proofing its business. The investment was seen as both a financial play and a test of emerging technology ecosystems.
Q: Did Meitu lose money during its crypto holding period?
A: Initially, the investment was underwater due to market volatility. However, by holding through downturns and exiting during a bull market, Meitu ultimately realized a $79.63 million gain.
Q: Does Meitu still have any blockchain-related operations?
A: No. Company representatives confirmed that Meitu no longer engages in blockchain or cryptocurrency activities. All holdings have been sold.
Q: How will the special dividend affect shareholders?
A: Approximately 80% of the crypto profits will be distributed as a one-time special dividend, offering immediate returns to investors following the successful exit.
Q: What are the main risks facing Meitu’s AI ambitions?
A: Intense competition from free AI models and established creative software companies poses a threat. Customer retention will depend on delivering superior, differentiated AI features.
Q: Is Meitu’s pivot away from crypto permanent?
A: While nothing is ruled out indefinitely, current strategy emphasizes core product growth. There are no public plans for re-entering the crypto market.
Looking Ahead: Innovation Without Distraction
Meitu’s journey—from early blockchain experiments to profitable crypto trading and now focused AI development—illustrates how tech companies can navigate disruptive trends without losing sight of fundamentals.
The closure of its crypto chapter isn’t just a financial milestone; it’s a symbolic return to form. By channeling gains into high-potential areas like AIGC and subscription services, Meitu aims to build lasting value in an increasingly competitive digital landscape.
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As artificial intelligence reshapes content creation, companies with deep domain expertise in imaging—like Meitu—are uniquely positioned to lead. The challenge now is execution: turning technological advantage into measurable user value and sustainable revenue growth.
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