Bitcoin Updates: Metaplanet Secures $130 Million Loan to Acquire Bitcoin, Pursuing 1% Supply Goal Despite Market Slump
Metaplanet Expands Bitcoin Holdings with $130 Million Loan
Japanese digital asset treasury company Metaplanet has obtained a $130 million loan to intensify its Bitcoin acquisition efforts, demonstrating strong belief in the cryptocurrency despite a general market decline. This loan is part of a larger $500 million credit line, with Bitcoin serving as collateral. With this latest draw, Metaplanet has now accessed $230 million in total, which will be used for further Bitcoin purchases, income-generating ventures, and potential share repurchases.
The announcement comes after Metaplanet's stock climbed 2%, surpassing the Nikkei 225's 1% gain, as investors responded favorably to the company's expanded Bitcoin strategy.
Loan Structure and Strategic Goals
The loan features a floating interest rate linked to a U.S. dollar benchmark, with daily renewal options and the flexibility for early repayment. Metaplanet highlighted that its Bitcoin reserves, currently valued at $2.7 billion, provide substantial collateral to weather price swings—even though the company is currently facing a 20% unrealized loss compared to its average purchase price of $108,036 per Bitcoin. This approach is reminiscent of the strategy used by MicroStrategy, which has also leveraged debt and equity to build its Bitcoin portfolio. Metaplanet has set an ambitious goal to hold 210,000 BTC, representing 1% of the total Bitcoin supply, by 2027.
Market Context and Additional Funding
This borrowing move comes during a period of declining cryptocurrency prices, with Bitcoin having dropped 31% from its October high of $126,080 and now trading around $87,500. While some critics warn of the dangers associated with holding such volatile assets, Metaplanet’s leadership remains optimistic, pointing to the potential for long-term growth and income generation through options trading. In addition, the company has announced a $135 million capital raise through perpetual preferred shares, which offer fixed returns and conversion rights, to further support its Bitcoin-focused initiatives.
Industry Trends and Challenges
Analysts observe that Metaplanet’s aggressive Bitcoin strategy is part of a broader movement among Japanese companies to adopt cryptocurrencies. Recently, six leading asset managers revealed intentions to launch both retail and institutional crypto funds, and regulators are considering allowing cryptocurrencies in mutual funds. Nevertheless, the sector faces obstacles, as many digital asset treasury firms have seen their stock performance lag behind the value of their crypto holdings, raising concerns about long-term viability.
Commitment to Bitcoin Despite Volatility
Despite the inherent risks, Metaplanet’s leadership, including Bitcoin strategy director Dylan LeClair, continues to advocate for a long-term “HODL” approach, taking advantage of market dips to increase their Bitcoin reserves. Some in the crypto community speculate that the recent loan was timed to coincide with Bitcoin’s drop to $82,000, suggesting a calculated move to buy at lower prices.
Metaplanet’s recent actions highlight the ongoing debate between reacting to short-term market fluctuations and maintaining confidence in Bitcoin’s long-term potential.
