Metaplanet Borrows $100 Million Against Its Bitcoin Holdings—To Buy More BTC

Japanese Bitcoin treasury Metaplanet is buying more Bitcoin after securing 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 that it was tailoring its borrowing and BTC accumulation strategy to account for Bitcoin’s price volatility. 

It reassured investors that “the company has adopted a conservative financial management policy of executing loans only within a range where collateral adequacy can be fully maintained, even in the event of significant price declines in Bitcoin.”

“We are committed to avoiding excessive leverage,” it added in the announcement. 

Metaplanet stock was trading 2% lower on Tuesday. Bitcoin was recently trading near $104,000, recovering some ground from a steep plunge on Tuesday that took the price below $100,000 for the first time since June. Bitcoin’s price was recently trading about 18% below its all-time high of $126,080 set in October, according to CoinGecko data. 

The fallen prices of Bitcoin and other digital assets have have highlighted concerns among skeptics of the treasury strategy pioneered by Strategy—formerly MicroStrategy—in 2020. On Tuesday, French semiconductor firm Sequans pared about $100 million in BTC from its treasury. 

And analysts have highlighted Strategy’s declining multiple to Net Asset Value (mNAV), the premium at which a firm’s shares trade relative to its crypto holdings. 

Metaplanet—which has been dubbed “Asia’s MicroStrategy” and is the fourth largest Bitcoin treasury—pivoted from its core hotel and technology business to start buying Bitcoin in 2024 and now holds 30,823 BTC worth nearly $3.2 billion at today’s BTC price. It is aiming to acquire 210,000 Bitcoin, about 1% of the overall supply, by 2027 as part of a master plan. 

Treasuries allow shareholders to gain exposure to the asset without the risks involved in holding it directly. 

Strategy is the largest corporate holder of the digital coin, with 641,205 BTC worth about 66.5 billion.

There are now over 200 publicly traded Bitcoin treasuries, according to bitcointreasuries.net, which tracks the trend, and others built around different altcoins, including Ethereum and Solana. 

Experts previously warned of the dangers of companies buying crypto and how it could be inherently risky. Now, the share prices of many of the firms that have bought digital assets have dropped as the prices of leading digital coins and tokens have slumped.

In a Myriad prediction market, about two in three respondents expect Bitcoin’s next move will take it to $115,000 and not down to $85,000. Myriad is a unit of Dastan, the parent company of an editorially independent Decrypt.