Metaplanet Shares Soar 90% Following Bitcoin Reserve Acquisition

The shares of Japanese public company Metaplanet surged nearly 90% following the announcement of a new strategy involving the acquisition of bitcoins worth 1 billion yen (~$6.6 million) for its balance sheet.

Today, we’re thrilled to announce a groundbreaking shift in our financial strategy, as we embrace Bitcoin as the core treasury asset of the Company going forward by committing an initial JPY 1 billion. This strategic pivot is not just about embracing digital assets but also about… pic.twitter.com/OASxj9IBPG

— Metaplanet Inc. (@Metaplanet_JP) April 8, 2024

The firm described this as the first step in transitioning its treasury to the leading cryptocurrency.

According to the statement, the transaction was facilitated by Sora Ventures, Mark Yusko of Morgan Creek Capital, and other industry representatives.

“The shift to Bitcoin marks a significant milestone in our mission to lead in the era of digital finance and positions Metaplanet as a pioneer in cryptocurrency adoption in Japan,” the statement said.

In a letter to investors, the company explained its decision to convert capital into cryptocurrency due to the persistent weakening of the yen as a result of negative interest rate policies. Bitcoin, despite its volatility, has consistently grown over the years. The firm expects digital gold to continue outperforming the Japanese currency.

“The company’s decision to include Bitcoin in its treasury assets is driven by a multifaceted understanding of its potential as a hedge against inflation, a tool for macroeconomic resilience, and a foundation for long-term capital appreciation,” Metaplanet emphasized.

It is anticipated that the company’s investors will be able to indirectly own bitcoins, reducing their portfolio’s exposure to the yen and diversifying it.

Metaplanet’s closing stock price reached 36 yen, up from 19 yen at the start of the trading session, marking an 89.47% increase.

According to the company’s website, it operates globally in the fields of Web3 consulting, real estate, and investments. The firm began its business under the name Red Planet as a budget hotel network operator.

Users noted that Metaplanet’s market capitalization is ~$12 million, and it was unprofitable by the end of 2023. Some believe it is incorrect to compare the firm with MicroStrategy.

Michael Saylor’s company was the first publicly traded firm to start converting reserves into Bitcoin in August 2020. After purchasing 9,245 BTC for $623 million in March 2024, its cryptocurrency holdings reached 214,246 BTC — over 1% of the total supply.

According to BitcoinTreasuries, MicroStrategy’s market capitalization is $25.7 billion, with Bitcoin reserves accounting for ~59% of that figure.

Regarding Metaplanet’s new strategy, a commentator under the nickname Pledditor warned:

“This looks like a major grift. It’s a shitcoin VC company, so just be warned unlike MSTR, you are exposed to the entirety of their fund which includes shitcoins.”

This looks like a major grift.

It’s a shitcoin VC company, so just be warned unlike MSTR, you are exposed to the entirety of their fund which includes shitcoins

— Pledditor (@Pledditor) April 8, 2024

Back in late March, MicroStrategy’s stock prices hit a 24-year high amid Bitcoin’s price recovery.

Analysts at Kerrisdale Capital labeled the shares as overvalued.