The Japanese company Metaplanet shows how to finance expansion in the era of cryptocurrencies – by taking out a loan against what you already have. A company listed on the Tokyo Stock Exchange obtained a USD 100 million loan secured by its own Bitcoin resources. Objective? Even more BTC and buy your own shares.
According to documentation filed on Tuesday, the funds were borrowed on October 31 as part of a credit agreement allowing for short-term financing with Bitcoin as an asset. The identity of the lender remains secret, but it is known that the interest rate is based on the benchmark USD rate plus a margin. Key information? The loan can be repaid at any time.
Metaplanet reassures us that the structure is conservative. The company has 30,823 BTC worth approximately $3.5 billion at the end of October – a position large enough to maintain solid collateral coverage even as Bitcoin prices decline. The funds raised will go to further BTC purchases, a business based on earning option premiums from Bitcoin holdings, and share repurchases, depending on market conditions.
USD 500 million purchase program!
The loan announcement came days after revealing a 75 billion yen ($500 million) share buyback program, also financed by a Bitcoin-backed loan. The aim is to rebuild investor confidence after the market net asset value (mNAV) fell below 1.0. Metaplanet’s mNAV, the ratio of the company’s value to its BTC holdings, briefly dropped to 0.88 last month before rebounding above parity. The company temporarily halted Bitcoin purchases during the decline, but maintains its goal of raising 210,000 BTC by 2027.
Model under the microscope
Meanwhile, the industry of companies whose capital is based on Bitcoin is undergoing a stress test. Last week, S&P Global Ratings assigned a “B-” (speculative grade) rating to Michael Saylor’s Strategy, citing excessive BTC focus, limited liquidity and a narrow business profile.
A report by 10x Research revealed that some companies saw their NAV collapse, wiping out billions of dollars in paper wealth. The boom in Bitcoin treasury companies, which issued shares at multiples of the real value of BTC, “came full circle” – leaving retail investors with deep losses while the companies themselves accumulated real Bitcoin.
Metaplanet expects the impact of the $100 million loan on fiscal 2025 results to be minor, but commits to disclosing any material changes.
