Metaplanet, the Japanese firm with the largest corporate crypto holdings in Asia, announced today it has secured a 130 million dollar loan to deepen its Bitcoin treasury strategy. The company confirmed in its official filing that, despite facing significant unrealized losses, it will use this fresh capital to continue accumulating BTC and boost its operations. According to the firm’s statement, this decision reaffirms its long-term commitment to the digital asset in the face of market volatility.
The financing is executed under a 500 million dollar credit line established in October, featuring a floating interest rate and daily renewal. Currently, Metaplanet holds 30,823 BTC valued at approximately 2.7 billion dollars, although its acquisition cost basis stands at 3.33 billion. This leaves the enterprise with an unrealized loss of 635.97 million dollars, equivalent to 19.1% of its portfolio, according to its latest treasury update.
On the other hand, management has emphasized that its collateral capacity remains strong, ensuring that the additional funds will not only buy more Bitcoin but also finance share repurchases. Revenue from Bitcoin options sales reached record figures in the third quarter, providing operational cash flow to sustain debt service. The loan structure allows for repayments at any time, offering flexibility against sharp changes in collateral valuation.
Is aggressive leverage sustainable amidst a market correction?
The context of this maneuver is complex, as it occurs while the firm restructures its capital base to avoid excessive dilution of common shareholders. Recently, they launched “Mercury” preferred shares, raising 135 million dollars with a 4.9% annual dividend. This move seeks to balance the books, given that Metaplanet shares have started trading below the value of its Bitcoin reserves, an anomaly that has led to the approval of a share repurchase program.
Likewise, the situation reflects broader stress in the sector, where 26 of the 168 Bitcoin-holding companies trade at a discount to their net assets. Bitcoin’s 10% price drop in a single session has pressured corporate treasuries, halting institutional accumulation by 95% since July. Despite this adverse environment, Metaplanet maintains its goal of acquiring 210,000 BTC by 2027, having already added 17,000 units in the last quarter.
The consequences for the market are palpable, as the use of leverage introduces risks of margin calls if the underlying asset price falls abruptly. Critics warn that a forced liquidation could exacerbate volatility, while supporters see this as an asymmetric bet similar to MicroStrategy’s. The disconnect between the stock price and reserves suggests skepticism among traditional investors, who are closely monitoring the firm’s ability to manage its debt.
To conclude, Metaplanet stands at a crossroads where its aggressive expansion faces the reality of red numbers on its balance sheet. The successful execution of this phase will depend on Bitcoin’s price recovery and the efficient management of its new capital instruments. The company is expected to continue using its dual approach of debt and preferred share issuance to navigate current turbulence without deviating from its ambitious accumulation target.
