Metaplanet, a Japanese investment firm similar to MicroStrategy, announced on August 8, 2024, that it has secured a loan of ¥1 billion (about $6.8 million) for Bitcoin purchase. This loan, from MMXX Ventures Limited, has a low-interest rate of 0.1% per annum and must be repaid in a lump sum within six months. This move is part of Metaplanet’s strategy to expand its Bitcoin holdings amid Japan’s economic uncertainties.

Strategic Bitcoin purchase

The decision of more Bitcoin purchase was formalized during a recent Board of Directors meeting. This announcement follows Metaplanet’s earlier plan to raise ¥10 billion (around $69 million) through a stock rights offering. Approximately ¥8.5 billion ($58 million) from this amount is allocated for Bitcoin investments. By using both debt and equity, Metaplanet shows confidence in Bitcoin as a long-term asset.

“Bitcoin offers a unique hedge against currency depreciation, especially considering Japan’s economic challenges,” said Simon Gerovich, CEO of Metaplanet. 

The company sees Bitcoin as crucial for protecting its financial health, particularly with Japan facing negative interest rates and a weakening yen.

On July 16, 2024, Metaplanet bought an additional 21.88 bitcoins, worth ¥200 million ($1.4 million), at an average price of ¥9.14 million ($57,600) per bitcoin. This purchase increased the company’s total Bitcoin holdings to approximately 246 bitcoins, valued at around $13.95 million based on current market prices. The firm intends to continue accumulating Bitcoin as part of its strategic planning.

Cointelegraph

Market impact and future plans

Despite a 12.8% drop in Bitcoin’s value since April 2024, Metaplanet’s stock price has surged by 290% since it announced its Bitcoin-centric strategy in April. The stock reached a year-high of ¥3,000 ($20.50) on July 24, 2024. This was before declining due to the broader cryptocurrency market downturn. On August 5, 2024, the cryptocurrency industry faced “Black Monday,” with Bitcoin’s price dropping by 10% in two hours. This event impacted Metaplanet’s stock, which has since fallen from its peak.

Metaplanet’s strategy has drawn comparisons to MicroStrategy, the American business intelligence company known for its extensive Bitcoin holdings. Like MicroStrategy, Metaplanet uses both debt and equity to increase its Bitcoin reserves. This approach is bold, especially given Japan’s high government debt and fragile yen.

In addition to the Bitcoin purchase, Metaplanet plans to tokenize its shares on the Bitcoin layer-2 network Liquid. This move aims to attract international investors who have limited access to the Japanese stock market. The firm’s stock is listed on the Tokyo Stock Exchange (TSE), but tokenizing shares could broaden its investor base.

Financial maneuvers and market reactions

Metaplanet’s aggressive strategy has caught the financial world’s attention. The decision to invest heavily in Bitcoin amid Japan’s economic challenges has sparked interest and debate. Some analysts see the move as risky but potentially rewarding, while others worry about Bitcoin’s volatility and the broader cryptocurrency market.

The firm’s recent financial moves show a strong belief in Bitcoin’s potential as a hedge against economic instability. By securing the ¥1 billion loan at favorable terms and planning a substantial stock rights offering, Metaplanet positions itself as a significant player in Bitcoin investment.

Read More: How to Buy Bitcoin: A Complete Guide

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