Key Takeaways:
Japanese business consultancy firm Metaplanet has adopted a new investment strategy to acquire Bitcoin (BTC) that emulates MicroStrategy’s approach towards the flagship cryptocurrency. This business strategy has significantly increased the company’s Bitcoin portfolio, with its valuation nearly doubling since the beginning of the year.
MicroStrategy board members accepted BTC as a treasury asset in 2020 and since then the price of its MSTR stock has rallied by a staggering 2,200%. This positions Metaplanet’s shares to post a similar movement if the company continues to hold and accumulate Bitcoin.
Metaplanet Stock Surges 500% Since The Start of 2024 As A Result of Bitcoin Investment Plan
Metaplanet first revealed its Bitcoin purchasing strategy earlier this year, and since May, the company has been consistently purchasing the digital asset through weekly acquisitions. At press time, the firm holds 1,018.17 BTC, which is valued at approximately $68.8 million, making it the second-largest corporate holder of Bitcoin in Asia, behind Boyaa Interactive, which holds 1,100 BTC.
The milestone was reached following its latest acquisition of 156.78 BTC on October 28. Metaplanet spent an average of around $61,629 per Bitcoin.
In the six months since adopting its Bitcoin investment strategy, Metaplanet’s shares have surged by an astounding 500%, reaching a peak of 1,800 yen ($11.62). CEO Simon Gerovich put out a statement where he said that the increase in Metaplanet’s Bitcoin portfolio currently stands at 4.27 billion yen ($28 million). He claimed that this valuation gain is larger than the company’s total market capitalization from the beginning of the year.
Renowned Bitcoin Core developer Adam Back disclosed that he invested in the Japanese company. According to him, Metaplanet’s market cap fluctuates between 5 to 7 times the value of its Bitcoin holdings, which amplifies the impact of its treasury on market valuation. Additionally, the investment firm generates yield by selling out-of-the-money Bitcoin options.
Metaplanet Raises Capital For Bitcoin Purchases Through the Sale of BTC Put Options
Last month, Metaplanet announced that it raised $1.46 million from the sale of its Bitcoin put options. The company sold 223 put options with a strike price of $62,000 per BTC, which are set to mature on December 27, 2024. The strategic move generated substantial premiums and has positioned the firm to increase its Bitcoin holdings should the coin’s market price fall below the strike price before maturity.
Metaplanet recently released its Q3 earnings report, which showed the BTC yield for the last quarter at a staggering 155%. The company introduced the program as a new key performance indicator (KPI) to measure the benefits of its Bitcoin accumulation strategy for shareholders. This KPI is aimed at gauging the effectiveness of its Bitcoin strategy and the benefits it brings to shareholders.
Metaplanet claims the BTC yield program will help enhance investors’ understanding of its funding strategy, particularly in scenarios where the company may choose to finance additional Bitcoins purchases by issuing common stock or convertible securities.
MicroStrategy has also increased its Bitcoin holdings in 2024, reporting a yield of 26% so far this year. If Metaplanet continues on this path, then shareholders can expect a very healthy appreciation its its stock price in the coming years.
The return of Donald Trump to the White House has generated positive sentiment across financial markets, especially among crypto investors. Market participants are optimistic about the future of Bitcoin as more corporations are looking to hold the apex cryptocurrency as a treasury asset.
At the time of writing, Bitcoin (BTC) is trading at $87,439 – down 0.52% in the last 24 hours.
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