Japanese investment firm Metaplanet has reported a notable $28 million gain in the valuation of its Bitcoin holdings, following a dedicated acquisition strategy that has brought its total to over 1,000 BTC. This increase solidifies Metaplanet’s position as one of Asia’s major corporate Bitcoin holders, with a cumulative investment exceeding $64 million. However, despite the positive BTC valuation, Metaplanet’s stock saw a slight decline in trading.
Metaplanet’s $28M Bitcoin Gain: The “Asia’s MicroStrategy” Approach
Metaplanet began using Bitcoin as a key treasury asset in May, adopting a strategy similar to that of U.S.-based MicroStrategy. The firm’s Bitcoin investments aim to hedge against the declining yen and provide resilience amid Japan’s low interest rates and high government debt. Metaplanet rapidly expanded its BTC reserves, reaching 1,018.17 BTC by October’s end, with cumulative spending near $64 million.
The company has financed its Bitcoin purchases through stock issuances, bond offerings, and a recent 10 billion yen loan. By late October, Metaplanet acquired an additional 156 BTC, capitalizing on a period of optimism in the crypto market, fueled by Bitcoin’s rally to $87,000.
Bitcoin as a Source of Income
Beyond asset appreciation, Metaplanet is enhancing its BTC holdings’ value through options trading, generating premium income to boost returns. This strategy helped the firm offset prior Bitcoin valuation losses, resulting in the current $28 million gain that significantly strengthens its balance sheet.
Operational Challenges and Stock Dip
Despite these gains, Metaplanet faces operational challenges. The firm reported a $2.1 million net operating loss for the first three quarters of 2024, due to rising costs in its hotel business, which contributed to a $1.23 million total operating loss. A modest 46.3% year-over-year revenue increase to $1.7 million was insufficient to fully offset these costs.
Following the earnings report, Metaplanet’s stock declined by 5%, closing at 1,766 JPY ($11.41), reflecting investor caution amid mixed earnings and market volatility.
A New Performance Indicator: BTC Yield
To improve transparency, Metaplanet introduced a Key Performance Indicator (KPI) called “BTC Yield,” inspired by MicroStrategy. BTC Yield measures the change in Bitcoin holdings per fully diluted share, reaching 155.8% in recent quarters. This metric helps investors assess the alignment of Metaplanet’s Bitcoin acquisition with shareholder value.
Metaplanet’s CEO, Simon Gerovich, emphasized the company’s “Bitcoin-first, Bitcoin-only” philosophy, affirming that it will continue acquiring Bitcoin as opportunities allow.
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