- June 12, 2024
- Posted by: [email protected]
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Metaplanet has experienced a remarkable surge in its share price following the announcement of its third significant Bitcoin (BTC) purchase in just seven weeks. On June 11, the company disclosed that it had acquired an additional 23.25 bitcoins, valued at nearly $1.59 million. This recent acquisition underscores Metaplanet’s strategic commitment to expanding its Bitcoin holdings, which now total 141.07 BTC, approximately valued at $9.6 million.
The average purchase price for these Bitcoins was $65,365 per coin, equating to 10,278,391 Japanese yen. With Bitcoin currently trading at $68,313, Metaplanet has realized a 4.5% gain on its investment, as reported by CoinGecko. This strategic move has not gone unnoticed by investors. The positive response led to a 10.8% rally in Metaplanet’s stock price, reaching $0.59, or 92 Japanese yen. However, by midday on June 11, the stock had settled slightly lower at $0.57, or 89 Japanese yen, on the Tokyo Stock Exchange, according to Google Finance.
Since unveiling its Bitcoin investment strategy on April 9, 2024, Metaplanet’s stock has nearly quintupled. The company’s initial Bitcoin purchase was 97.85 BTC on April 23, followed by an additional 19.87 BTC on May 10, as reported by Bitcoin Treasuries. These acquisitions have positioned Metaplanet as the 30th largest corporate Bitcoin holder globally. This aggressive strategy mirrors that of MicroStrategy, the largest corporate Bitcoin shareholder. On May 13, Metaplanet announced plans to adopt various capital market instruments to strengthen its Bitcoin reserves, aiming to hedge against Japan’s growing debt burden and the rapid depreciation of the yen.
Japan’s economic challenges are a significant driver behind Metaplanet’s strategy. The country’s debt-to-GDP ratio stands at an alarming 261%, the highest among developed nations. Over the past year, the Japanese yen has depreciated by about 35% against the US dollar, while Bitcoin has surged nearly 200% against the yen. This disparity has made Bitcoin an attractive asset for companies like Metaplanet, which seek to mitigate exposure to the weakening yen.
Despite Metaplanet’s recent acquisitions, its Bitcoin holdings are modest compared to those of MicroStrategy, which owns 214,400 BTC, roughly 1.02% of the total Bitcoin supply. Metaplanet’s shares are currently traded exclusively on the Tokyo Stock Exchange, limiting accessibility for US investors.
In April, Metaplanet explained its decision to incorporate Bitcoin into its treasury assets, citing several factors. The company aims to minimize its exposure to the yen, which has been significantly impacted by Japan’s low-interest-rate environment. In a shareholder update, Metaplanet highlighted the yen’s vulnerability and Bitcoin’s potential as a hedge against inflation, a tool for macroeconomic resilience, and a source of long-term capital appreciation.
This strategic move follows the success of major corporate investors in Bitcoin, such as MicroStrategy. According to data aggregated by Saylortracker, MicroStrategy’s Bitcoin holdings are now valued at over $14.59 billion, with unrealized profits of almost $6.5 billion, reflecting a 104% yield-to-date from an investment allocation started under CEO Michael Saylor in 2020.
Currently, Bitcoin is trading around $67,900, down more than 2% over the past day and 8% below its all-time high of $73,750, registered on March 14. Despite the recent decline, Bitcoin’s long-term performance continues to attract corporate interest and investment, as evidenced by Metaplanet’s aggressive acquisition strategy.
Metaplanet’s strategic investment in Bitcoin is driven by a combination of economic factors and the cryptocurrency’s potential for significant returns. As the company continues to expand its Bitcoin holdings, it reinforces the growing trend of corporate adoption of Bitcoin as a hedge against traditional economic vulnerabilities.
