Japanese investment firm Metaplanet has secured a $6.8 million loan (1 billion Japanese yen) from one of its shareholders, MMXX Ventures, to increase its Bitcoin holdings.
This move follows Metaplanet’s recent announcement to raise $70 million through a stock rights offering, with $58 million earmarked for Bitcoin investments.
Metaplanet to Fund Bitcoin Investments
Metaplanet’s loan carries a 0.1% interest rate per annum and a six-month term starting on August 8, with repayment in a lump sum. If the firm allocates the entire $6.8 million loan to Bitcoin, it could purchase an additional 118.5 BTC at current market prices.
On May 13, Metaplanet declared its intention to use a variety of capital market instruments to enhance its Bitcoin reserves, adopting a strategy similar to MicroStrategy. This decision aims to hedge against Japan’s escalating debt burden and the rapidly depreciating yen.
Before embracing BTC, Metaplanet struggled as a “zombie” company, according to CEO Simon Gerovich, who spoke at the Bitcoin 2024 conference in late July. Gerovich shared his challenges in stabilizing Metaplanet’s finances and reducing debt until recognizing Bitcoin as a potential solution to improve the company’s long-term success.
To date, Metaplanet has acquired 246 BTC, valued at approximately $13.95 million at current market prices, through seven separate purchases, according to Bitcoin Treasuries data. The firm’s average Bitcoin purchase price is $65,145, resulting in a 12% decline since its first investment on April 23.
Metaplanet Shares Surge
Google Finance data reveals that Metaplanet’s stock price has surged over 300% since announcing its Bitcoin strategy on April 9. It is now trading at $6.11 (893 Japanese yen). However, this price is significantly lower than its year-high of $20.50 (3,000 Japanese yen), reached on July 24.
The decline in stock price was exacerbated by the crypto market’s “Black Monday” on August 5, when Bitcoin plummeted by 10% within two hours.
Meanwhile, Bitcoin ETF inflows have regained strength, turning net positive on Wednesday, August 7. BlackRock’s IBIT led with $52.5 million in inflows, while Grayscale’s GBTC experienced $30.6 million in outflows.
As for the Japanese stock market, it recently suffered its worst one-day drop since 1987 when the Bank of Japan raised rates on short-term government bonds from 0% to 0.25% on July 31.
Despite these market fluctuations, Metaplanet earlier said that it remains confident in Bitcoin’s long-term potential. The company believes that an increase in BTC prices will strengthen its balance sheet, enhance asset value, and positively contribute to its earnings.
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