[NEWS] Metaplanet, listed on the Tokyo Stock Exchange, announces purchase of 1 billion yen worth of Bitcoin as part of its capital management strategy

Metaplanet, listed on the Tokyo Stock Exchange Standard Exchange, announced on the 8th that it will purchase Bitcoin (BTC) as part of its fund management strategy. According to the announcement, the company will purchase Bitcoin with funds raised through the "Notice regarding approval of the transfer of the 9th stock acquisition rights."

Metaplanet operates hotels as a core business, and engages in business and investments that utilize Web 3.0 and blockchain.

The total amount of Bitcoin purchased is 1 billion yen. The company explains that this was made possible through new investments from strategic partners who are familiar with Bitcoin and crypto assets (virtual currencies).

The announcement was well received, and the stock price soared. At the time of writing, the price temporarily rose to 39 yen, up about 100% from the previous day.

The reason for purchasing Bitcoin is that the Japanese yen's position as the world's main currency has significantly weakened due to the depreciation of the yen over the past few years and the negative interest rate policy for many years.

On the other hand, contrary to initial skepticism about Bitcoin and other crypto assets, their presence has been increasing with each passing year. Metaplanet points out that Bitcoin has now become so popular that some countries, such as El Salvador, have adopted it as their official currency.

Although Bitcoin tends to be volatile, its value has steadily increased over the past decade. Therefore, it is widely expected that it will maintain its value as a highly liquid, long-term major currency even when converted to Japanese yen.

Metaplanet will raise approximately 935 million yen by exercising stock acquisition rights. As seen in the trends of several listed companies, mainly in the United States, the company will diversify its currency holdings by investing and holding Bitcoin as part of its cash management strategy, thereby building a self-position with low exposure to the Japanese yen.

One company that invests in Bitcoin is the US intelligence company MicroStrategy, which held approximately 214,246 BTC (equivalent to approximately 2.32 trillion yen) as of March. The value of Bitcoin has been constantly increasing over the long term, and it is considered suitable for long-term holding, so Metaplanet will adopt a similar strategy.

The existence of a Bitcoin spot ETF approved in the United States is a major reason why Metaplanet decided to purchase Bitcoin. In addition to the expectation of further capital inflows in the future, the company states that with a 21 million BTC issuance limit, Bitcoin is an asset class that is valued based on the principle of supply and demand.

Furthermore, amid increasing uncertainty in the global economy, Bitcoin stands out as an asset that is not bound by the economy or economic conditions of any country, and it is described as "functioning as the ultimate safe harbor."

Going forward, Metaplanet will mark its Bitcoin holdings to market every quarter and record the unrealized gains and losses as special items in the income statement. In addition, if there is a significant impact on quarterly performance, the company plans to promptly disclose such an impact.

Reference: Announcement 1 , Announcement 2
Image: Shutterstock

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