• A renowned Japanese public company has publicly announced its plans to raise $60 million from its shares to increase its Bitcoin (BTC) holdings to $70 million. 

• According to them, Bitcoin has the potential to appreciate in the long term while acting as a hedge against inflation. 

A Japanese public company, Metaplanet, has disclosed its intention to leverage the suddenly evolving crypto landscape to increase its Bitcoin (BTC) holdings by $60 million. According to reports, the company’s existing holdings are $13.4 million worth of Bitcoin. However, the recent decline in revenue from its hotel business positions it to utilize the power of digital assets to strengthen its financial position.

According to our investigation, the significant expansion is also meant to reduce exposure to the Yen and make the asset class accessible to Japanese investors. 

As confirmed by multiple sources, Metaplanet commenced its Bitcoin acquisition in April 2024 and has since purchased a significant amount every month. In July, for instance, the company made four separate purchases amounting to 105 BTC after its 19 BTC acquisition in May. 

To fund this ambitious and strategic initiative, a recent board of directors meeting approved a gratis allotment of its 11th series of stock acquisition rights. This implies that shareholders would receive one stock acquisition right per common share by September 5. 

According to our information, the rights would enable shareholders to acquire Metaplanet common stock at around $4 between September 6 and October 15, 2024. 

Metaplanet’s Decision on Bitcoin Hinges on Two Factors

According to Metaplanet’s CEO, Simon Gerovich, the consensus was reached for the fact that Bitcoin is considered “the apex monetary asset.” Also, the decision was based on two key factors – the potential of the long-term appreciation of the asset, and its ability to act as an effective hedge against inflation. This is deemed important considering the recent volatility in the Japanese stock market and the depreciation of Yen against the USD.

A recent monetary decision by the Bank of Japan, raising rates on short-term government bonds from 0% to 0.25%, caused the Japanese stock market to witness its worst one-day drop since 1987. 

Specifically, the governor of the Bank of Japan (BOJ), Shinichi Uchida, recently disclosed that the central bank would not hike borrowing costs, which caused risk aversion in risk assets, as we reported yesterday, August 6. 

As we’re seeing sharp volatility in domestic and overseas financial markets, it’s necessary to maintain current levels of monetary easing for the time being.

Explaining the scenario, CEO of Damped Spring Advisors Andy Constan highlighted how the equity market and other asset classes began a serious liquidation following these monetary decisions. 

By July 16th, the equity markets and many other risky asset markets peaked. For whatever reason, these asset markets began to sell off. As the sell-off continued, recent entrants into the YCT [yen carry trade]saw their assets falling, and to be clear, that is almost always the driver of unwinds. But worse, the Yen began rallying slowly. That began the unwind.

Regardless, Metaplanet expects that a bullish reversal of the Bitcoin price could strengthen its balance sheet, boost its value, and contribute to its revenue growth. In the future, it will sell covered calls on Bitcoin while revamping its hotel business to attract enthusiasts. 

At press time, Bitcoin was trading at $57,520 after surging by 4.6% in the last 24 hours. 

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