Japanese Investment Firm Metaplanet Secures $6.8M Loan to Increase 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.

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 (BTC) holdings, according to a filing on Aug 8.

This move follows Metaplanet’s recent announcement to raise $70 million through a stock rights offering, out of which $58 million will be earmarked for Bitcoin investments.

Metaplanet to Fund Bitcoin Investments

The loan carries a 0.1% interest rate per annum and a six-month term starting on August 8. The loan amount will be repaid in a lump sum at the end of the term.

If the firm decides to allocate the entire $6.8 million loan to Bitcoin, it could purchase an additional 118.5 BTC at current market prices.

On May 13, Metaplanet announced its intention to use a variety of capital market instruments to enhance its Bitcoin reserves, adopting a strategy akin to MicroStrategy. This decision is aimed at hedging 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 he recognized 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, reflecting 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. This decline in stock price was exacerbated by the crypto market’s “Black Monday” on August 5, when BTC dropped by 10% within two hours.

Bitcoin ETF Inflows Turn Net Positive

Meanwhile, Bitcoin ETF inflows regained strength, turning net positive on Wednesday, Aug 7. Among the ETFs, 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 contribute positively to its earnings.

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