Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 5

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 5
---
 as the provision we make to the inventory as we manage inventory level based on, among others, forecasts for sales and service provisions.
As we may increase our procurement volume for the launch of new services or products or due to expected surge of demand, a significant
drop in the price of digital assets can lead to a lower expected sales price and excessive inventories, which in turn will lead to impairment
losses with respect to such inventories. A significant drop in the price of digital assets may also subject us to impairment loss for
digital assets held for our own account. For example, we recorded impairment losses on digital assets of US$12.9 million, US$7.0 million,
and nil in 2022, 2023, and 2024, respectively, when the price of Bitcoin declined significantly against its carrying value. As of January
1, 2024, we have early adopted fair value measurement in accordance with ASU 2023-08, resulting in a fair value gain of US$37.6 million
recorded in 2024. As a result, any future significant reductions in the price of Bitcoin and other digital assets will likely have a material
and adverse effect on our results of operations and financial condition.

We hold stablecoins for our business operations,
and are subject to the risks associated with stablecoins.

We hold stablecoins, in particular
USDT, for our business operations. As of December 31, 2022, 2023 and 2024, the total value of USDT that we held for our own account was
approximately US$55,515, US$60,860 and US$4,817,051 respectively. For example, we may receive USDT as payments for our cloud-mining service,
and other digital assets such as BTC and ETH received by us as service payments are automatically converted into USDT. Since October 2022,
we have begun to convert our USDT into U. S. dollars and deposit them with banking institutions on a timely basis according to our treasury
management strategy. See “ Item 4. Information on the Company - B. Business Overview - Digital Assets.” A stablecoin
is a digital asset that seeks to maintain a stable value and is backed by an asset or portfolio of assets, such as fiat currency like
the U. S. dollars. There is a risk that the stablecoin issuer does not hold the corresponding asset underlying each stablecoin in circulation
and is therefore unable to fulfill one-for-one red