Amid growing concerns over Japan’s financial stability, Metaplanet, a Japanese investment firm, is turning to Bitcoin as a strategic asset. But is this a serious long-term strategy or a short-term maneuver to boost its sagging stock price?
Recently, Metaplanet purchased an additional $1.6 million worth of Bitcoin, bringing its total holdings to 141 Bitcoin, valued at approximately €8.6 million. This marks the company’s third Bitcoin acquisition since April 2024, which has significantly boosted its stock price. The strategy seems to be paying off.
Metaplanet, which has invested in real estate and companies for over a decade, launched its Bitcoin strategy in April 2024. This month, it designated Bitcoin as its strategic reserve currency, citing Japan’s substantial debt, persistent negative interest rates, and the yen’s growing instability as key reasons. Japan’s net debt ratio exceeded 250% of GDP last year, the highest among G7 countries, and the yen has lost more than 50% against the dollar since 2021.
Japan’s financial troubles are becoming increasingly hard to ignore. Metaplanet explains its Bitcoin strategy by highlighting the cryptocurrency’s established role in global finance. There is little doubt that “Bitcoin now plays a role in international investment.” In April, Metaplanet purchased 117.7 Bitcoins for about $7.19 million, demonstrating its belief in Bitcoin’s potential to retain value against the yen and serve as a highly liquid, long-term supportive currency.
In a move reminiscent of MicroStrategy, the US company that has accumulated over 100,000 Bitcoin, Metaplanet announced plans to raise an additional 935 million yen (approximately €5 million) through “stock acquisition rights.” This capital will be used to buy more Bitcoin, aligning with a trend among some listed companies, particularly in the US. Metaplanet describes this as “a strategic transformation” aimed at reducing the proportion of yen in its portfolio and mitigating associated risks.
On May 10, Metaplanet acquired another 19.87 Bitcoin for 200 million yen, followed by 23.25 Bitcoin on the same day. These purchases were accompanied by press releases in both Japanese and English, indicating Metaplanet’s intent to attract international investors.
This strategy has provided a timely boost to Metaplanet’s share price, akin to a deus ex machina saving a hero from the brink of disaster. The company’s stock, which had been in decline for many years, reached an all-time low of under 15 yen in spring 2024. The Bitcoin strategy has reversed this trend, with the first purchase raising the price to 36 yen. By the end of May, it had climbed to over 80 yen, and after the third purchase last week, it briefly surpassed 100 yen – the highest level since 2020.
While some observers are optimistic, dubbing Metaplanet “Japan’s MicroStrategy,” this comparison is premature given the stark difference in scale. Little is known about Metaplanet’s other investments or successes. Its stock price, which has been falling for over a decade, suggests a company whose greatest achievement may be its approval for stock trading, leaving it as a struggling penny stock.
Does it make sense for such companies to boost their stock prices by publicly buying Bitcoin? Does this benefit anyone other than the owners and shareholders? And what about Bitcoin? While this strategy might offer temporary relief, if it becomes a trend, could these companies’ Bitcoin holdings eventually weigh down the cryptocurrency’s price like a perpetual mortgage?
