In summary
- Metaplanet is using its huge Bitcoin holdings as collateral to buy $100 million more of the cryptocurrency.
- The Tokyo Stock Exchange-listed company is the fourth-largest Bitcoin treasury in the world.
- Metaplanet’s announcement comes at a time when some digital asset treasuries face challenges.
Japanese bitcoin Treasury Metaplanet is buying more Bitcoin after taking out a $100 million loan using its crypto as collateral, the Tokyo Stock Exchange-listed company announced.
In a Tuesday notice to its shareholders, the company said it was adapting its BTC borrowing and accumulation strategy to account for Bitcoin price volatility.
He assured investors that “the company has adopted a conservative financial management policy of executing loans only within a range in which collateral adequacy can be fully maintained, even in the event of significant Bitcoin price declines.”
“We are committed to avoiding excessive leverage,” he added in the announcement.
Metaplanet shares were trading 2% lower on Tuesday. Bitcoin was recently trading near $104,000, recovering some ground from a sharp drop on Tuesday that took the price below $100,000 for the first time since June. Bitcoin’s price was recently trading around 18% below its all-time high of $126,080 set in October, according to data from CoinGecko.
The drop in prices of Bitcoin and other digital assets has highlighted concerns among skeptics of the treasury strategy started by Strategy (formerly MicroStrategy) in 2020. On Tuesday, French semiconductor company Sequans cut around $100 million worth of BTC from its treasury.
And analysts have highlighted the decline in Strategy’s multiple to net asset value (mNAV), the premium at which a company’s shares trade relative to its cryptocurrency holdings.
Metaplanet, which has been dubbed “Asia’s MicroStrategy” and is Bitcoin’s fourth-largest hoard, abandoned its core hotel and technology business to start buying Bitcoin in 2024 and now owns 30,823 BTC worth nearly $3.2 billion in BTC price today. Is aim acquire 210,000 Bitcoin, approximately 1% of the total supply, by 2027 as part of a master plan.
Treasury bonds allow shareholders to gain exposure to the asset without the risks involved in owning it directly.
Strategy is the largest corporate holder of the digital currency, with 641,205 BTC worth approximately 66.5 billion.
There are currently over 200 publicly traded Bitcoin treasuries. according to bitcointreasuries.net, which tracks the trend, and others built around different altcoins, including Ethereum and solarium.
Experts previously warned of the dangers of companies buying cryptocurrencies and what it could be like inherently risky. Now, the share prices of many of the companies that bought digital assets have fallen as the prices of major digital coins and tokens have plummeted.
In a Myriad prediction market, about two in three respondents expect Bitcoin’s next move to take it to $115,000 and not $85,000. Myriad is a unit of Dastan, the parent company of an independent publisher Decipher.
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