Metaplanet to Purchase $6.3 Million Bitcoin Through Bond Issuance

Highlights:

• Metaplanet issues ¥1 billion in bonds at 0.5% interest to acquire Bitcoin.
• The proceeds will be used to purchase Bitcoin for long-term holding.
• Metaplanet’s Bitcoin holdings now total 141.0727 BTC, valued at ¥1.45 billion.

Metaplanet Inc., a Tokyo-listed investment firm, has announced plans to acquire Bitcoin worth ¥1 billion ($6.3 million) through the proceeds from an upcoming bond issuance. The company’s board of directors approved this decision, aiming to bolster Metaplanet’s cryptocurrency holdings significantly.

*Metaplanet directors authorize purchase of ¥1 billion of $BTC from bond proceeds* pic.twitter.com/4eZ6JfQ2cc

— Metaplanet Inc. (@Metaplanet_JP) June 24, 2024

Details of the Bond Issuance

The bond issuance, classified as the second series of ordinary bonds with guarantees, seeks to raise ¥1 billion. Each bond, valued at ¥50 million, carries an annual interest rate of 0.5%. The bonds will be payable on June 26, 2024, and mature on June 25, 2025. Redemption will occur at ¥100 per bond for every ¥100 of the bond amount. Notably, EVO FUND, the bondholder, has the option to call the bond with a month’s notice, except during the first three months.

Simon Gerovich, Metaplanet’s Representative Director and President, guarantees the bonds, securing them with a first-priority mortgage on the land and building of Hotel Royal Oak Gotanda, owned by Wen Tokyo Inc., a wholly-owned subsidiary of Metaplanet. No bond administrator will be appointed as the bonds comply with the Companies Act requirements.

Bitcoin Acquisition Strategy

Metaplanet will exclusively use the capital raised from the bond issuance to purchase Bitcoin. According to Metaplanet’s policy, the firm will hold Bitcoin for the long term. Consequently, it will record long-term Bitcoin holdings at cost and exempt them from end-of-term market value assessment taxation.

Metaplanet will conduct quarterly market value evaluations for other Bitcoin holdings. Therefore, it will record gains or losses under non-operating income or expenses. Furthermore, Bitcoin used for operational purposes will be classified as a current asset on the balance sheet.

With its recent Bitcoin purchases, Metaplanet now ranks as the 30th largest corporate Bitcoin holder globally, according to Bitcoin Treasuries. Although its holdings are modest compared to MicroStrategy’s 226,331 BTC following the recent purchase of $786 million worth of Bitcoin. Metaplanet’s commitment to integrating Bitcoin into its treasury assets has attracted considerable interest. Currently, Metaplanet holds 141.0727 Bitcoins, purchased at an average price of ¥10,278,391 per Bitcoin, totaling ¥1.45 billion.

Economic Context and Future Outlook

Metaplanet anticipates that this transaction will have minimal impact on its consolidated performance for the fiscal year ending December 2024. The firm will promptly notify stakeholders if it determines any significant impact. This move reflects a growing trend among corporations to leverage cryptocurrency in their investment portfolios. 

Following the announcement, Metaplanet’s stock price surged almost 15% during the morning session, marking a significant increase. Over the past month, the stock has risen by 37%, reflecting positive investor sentiment towards the company’s strategic move.

Metaplanet’s decision to invest in Bitcoin is driven by Japan’s rising debt burden and the yen’s declining value. The country’s high government debt and persistent negative interest rates highlight fiscal challenges that make Bitcoin an attractive hedge.

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Disclaimer: Cryptocurrency is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.