Metaplanet, a prominent player in the cryptocurrency landscape, is making headlines by leveraging its substantial Bitcoin holdings to secure additional funds. The Tokyo Stock Exchange-listed company has announced its intention to purchase $100 million more in Bitcoin after obtaining a loan secured by its cryptocurrency assets. This strategic move positions Metaplanet as the world’s fourth-largest Bitcoin treasury, indicating its growing influence in the digital asset space.
In a notice sent to shareholders, Metaplanet outlined its approach to managing both its borrowing and Bitcoin acquisition strategy, emphasizing their awareness of the cryptocurrency’s notorious price volatility. The company reassured investors that it is committed to a conservative financial management policy, ensuring that loans are executed only within limits that maintain collateral adequacy, even in the face of considerable price drops in Bitcoin. The announcement reiterated Metaplanet’s focus on avoiding excessive leverage, which is a critical aspect of their investment philosophy.
Despite the ambitious plans, the company’s stock saw a decline of 2% on the day of the announcement. Bitcoin’s price had recently hovered around $104,000, indicating a recovery after experiencing a significant drop below $100,000, a level not seen since June. Currently, Bitcoin’s value sits approximately 18% lower than its all-time high of $126,080 recorded in October, based on data from CoinGecko.
The current landscape for digital asset treasuries has been challenging. Concerns have arisen regarding the treasury strategy, which began gaining traction with Strategy—formerly MicroStrategy—in 2020. Recently, French semiconductor firm Sequans opted to reduce its Bitcoin holdings by approximately $100 million, highlighting the pressures facing companies heavily invested in cryptocurrency. Analysts have raised alarms over Strategy’s decreasing multiple to Net Asset Value (mNAV), which measures the premium at which a company’s stock trades relative to its cryptocurrency inventory.
Metaplanet, often referred to as “Asia’s MicroStrategy,” diverged from its core hotel and technology business to invest in Bitcoin beginning in 2024. The firm currently possesses 30,823 BTC, valued at nearly $3.2 billion at present prices, and has ambitious plans to acquire a total of 210,000 Bitcoin by 2027, aiming to capture roughly 1% of the total Bitcoin supply.
Bitcoin treasuries allow investors to gain exposure to cryptocurrencies without directly holding the assets, a less risky approach for shareholders. Strategy remains the largest corporate holder of Bitcoin, boasting 641,205 BTC worth an estimated $66.5 billion. The trend of publicly traded Bitcoin treasuries has gained significant momentum, with reports indicating that over 200 such treasuries are now in existence, alongside others focused on different cryptocurrencies like Ethereum and Solana.
Experts have long warned of the inherent risks associated with corporate investments in cryptocurrency, and many firms that entered the digital asset space have witnessed declines in stock prices following recent downturns in the value of major digital currencies. However, amid this uncertainty, a recent Myriad prediction market survey revealed that two-thirds of participants expect Bitcoin’s next movement to be upward, predicting a rise to $115,000 rather than a dip to $85,000.
