Metaplanet’s Bitcoin Strategy Fails to Yield Expected Returns: Study Reveals

Key Points

• Metaplanet Inc’s Bitcoin strategy is under scrutiny as its enterprise value drops below its Bitcoin reserves.
• The company’s share price has not kept pace with its ambitious goal of accumulating 30,000 BTC by the end of 2025.

Metaplanet Inc, a company listed in Tokyo, is facing increasing pressure due to its aggressive Bitcoin strategy. The enterprise value of the company has dipped below the value of its Bitcoin reserves, as stated in a recent Bloomberg report.

The company started buying Bitcoin in April 2024 to hedge against Japan’s persistent economic issues such as rising public debt and a weakening yen. It took a leaf from MicroStrategy’s playbook, making Bitcoin a strategic reserve asset.

Initial Success to Subsequent Pressure

Initially, this strategy was successful. The company’s stock reached record highs by mid-June, trading at a significant premium to the value of its crypto holdings. However, the rally soon halted, and the shares have since dropped about 70% from their peak.

As of October 14, the combined market cap and debt of Metaplanet equaled just 99% of its Bitcoin holdings, causing its modified net asset value (mNAV) to fall below one.

According to data from BitcoinTreasuries.Net, Metaplanet currently holds over 30,823 Bitcoin, valued at over $3.4 billion. This places it as the fourth-largest public holder of the top crypto after Strategy Inc., MARA Holdings, and XXI.

Despite achieving its ambitious target of amassing 30,000 BTC by the end of 2025, the company’s share price has not kept up.

In September, shareholders approved a plan to issue preferred shares, raising about $1.4 billion through an international equity sale to continue expanding its Bitcoin reserves. However, analysts note that with less capital available for countercyclical purchases, the firm’s role as a key market buyer has weakened. This has added to the pressure on its stock, which is down 20% in the past week.

Challenges for Digital-Asset Treasury Firms

Many digital-asset treasury firms (DATs) have recently experienced this stock downturn. Companies that once traded at premiums are now slipping into discounts as investor enthusiasm wanes amid the BTC price slump.

Experts caution that large Bitcoin exposures could spark liquidity crises during downturns, describing the model as a “ticking time bomb.”

Meanwhile, some long-term Bitcoin believers see Metaplanet’s discount as a potential buying opportunity. Despite cooling corporate demand, investors continue to pour money into spot Bitcoin ETFs, attracting over $5 billion in inflows so far in October.