Metaplanet, often called Japan’s version of MicroStrategy for following Michael Saylor’s Bitcoin investment game plan, is at a crucial point as Bitcoin (BTC) slips below 30% of its all-time highs in less than a month.
Metaplanet’s Bitcoin Holdings Take a Hit
As of November 26, Metaplanet holds the title of being the fourth largest public Bitcoin treasury company, with over 30,000 BTC valued at around $2.7 billion. Their average purchase price stands at $108,000 per coin, while Bitcoin is currently trading at about $87,700, leading to a hefty loss of nearly 17% on their investments.
Currently, the company is about $640 million in the red, and its stock has taken a nosedive, plummeting 81% from June’s peak of ¥1,935 to just ¥366 per share on the Tokyo Stock Exchange.
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Recently, Metaplanet secured an extra $130 million to boost its Bitcoin holdings, which they revealed in a filing on November 21 under an already set up $500 million credit line announced in late October.
This loan has a floating interest rate that adjusts daily, allowing quick repayment. Plus, it’s fully backed by the company’s Bitcoin reserves.
Still, market expert Shanaka Anslem is raising some eyebrows on social media platform X (formerly Twitter) about how this could affect Metaplanet’s short-term stability.
Upcoming Dates to Mark
Anslem pointed out two key dates that everyone should keep an eye on: December 18, when the Bank of Japan (BoJ) will make a call on interest rates, and December 22, the date Metaplanet shareholders will vote on a proposed $135 million fundraising effort.
These events are closely linked. According to Anslem, if the Bank of Japan goes for a tighter monetary policy, leading to a stronger yen, Bitcoin prices might fall, which could cause Metaplanet’s stock premium to crash and jeopardize the fundraising vote.
On the flip side, if the central bank keeps its loose policies, weakening the yen but stabilizing Bitcoin prices, the vote could succeed and help the company stay afloat.
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This situation isn’t just about Metaplanet; it’s significant for Japan as a whole. Right now, Japan doesn’t have a Bitcoin exchange-traded fund (ETF), making Metaplanet the only way for Japanese investors to get into Bitcoin through the stock market.
This unique position contributed to a whopping 4,000% increase in the company’s stock value in 2024, but recently it fell 81% when Bitcoin dropped by 30%, sparking fears of a looming bear market among investors.
With leverage in play, the risks are high. For Metaplanet to break even, Bitcoin needs to hit $108,000. For their investment model to work well, BTC must exceed $130,000. If Bitcoin dips below $70,000, Metaplanet might have to offload assets to meet collateral demands. Anslem also remarked:
For now, Metaplanet stands as neither a clear-cut success nor failure but rather the most significant trial in corporate Bitcoin allocation on the go… The hotel company that went all-in on Bitcoin is nearing its moment of truth. The world is watching closely.
Featured image from DALL-E, chart from TradingView.com