Metaplanet has made an unusual move with its Bitcoin reserves as it looks to strengthen its position in credit markets. The Japanese company sold 10,000 BTC before later buying 11,000 BTC back at a higher average price. Rather than abandoning its Bitcoin strategy, the transactions were designed to prove that its holdings could be converted into cash when financial obligations arise.
Bitcoin sale comes at a cost
During the third quarter, Metaplanet sold 10,000 BTC at an average ¥12.47 million per coin, generating ¥124.7 billion. Management said the cash proceeds exceeded the outstanding principal of its bonds, borrowings and other interest-bearing debt, supporting its case to rating agencies and fixed-income investors.
Bitcoin subsequently increased in price before the company rebuilt its position. Metaplanet purchased 11,000 BTC at an average ¥13.63 million each for roughly ¥149.9 billion, creating an adverse price difference of around ¥11.57 billion on the 10,000 BTC required to restore its original holdings.
By September 30, its Bitcoin reserves had reached 44,000 BTC, representing a net quarterly increase of 1,000 BTC. Separately, the sale generated a US capital-loss carryforward that could result in a deferred tax asset worth about $97 million, although recognition remains subject to closing procedures and auditor review.
New income strategy planned
Metaplanet now wants a stronger credit profile to help secure cheaper funding through corporate bonds, perpetual preferred stock and Bitcoin-backed credit facilities. Under its new Net Interest Income Strategy, borrowed capital would be invested in assets offering yields above its financing costs.
Bitcoin is expected to remain roughly 85% to 90% of total assets, while strategic investments would account for around 10% to 15%. Preferred securities issued by other Bitcoin treasury companies could become a major investment target.
Cheaper yen-denominated financing may provide an advantage, but the strategy still carries Bitcoin correlation, credit, currency and leverage risks. Metaplanet also cautioned that receiving a credit rating, securing favourable financing terms and successfully issuing future securities are not guaranteed.
