Metaplanet Gets $6.8 Million Loan To Boost Bitcoin Holdings

Japanese investment firm Metaplanet has secured a $6.8 million (¥1 billion) loan from one of its shareholders, MMXX Ventures, to increase its holdings in Bitcoin.

The move follows Metaplanet’s recent announcement to raise $70 million through a stock rights offering, with $58 million earmarked for Bitcoin investments.

Metaplanet to finance investments in Bitcoin

The Metaplanet loan carries an interest rate of 0.1% per annum and a term of six months from August 8, with a lump sum payment. If the company allocates the entire $6.8 million loan to Bitcoin, it could buy an additional 118.5 BTC at current market prices.

On May 13, Metaplanet stated its intention to use a variety of capital market instruments to enhance its Bitcoin reserves, adopting a strategy similar to MicroStrategy. This decision is intended to protect against the escalation of Japan’s debt and the rapid depreciation of the yen.

Before embracing BTC, Metaplanet struggled as a “zombie” company, according to CEO Simon Gerovich, who spoke at the Bitcoin 2024 conference in late July. Gerovich shared his challenges in stabilizing Metaplanet’s finances and reducing debt to recognizing Bitcoin as a potential solution to enhance the company’s long-term success.

To date, Metaplanet has acquired 246 BTC, valued at approximately $13.95 million at current market prices, through seven separate purchases, according to data from Bitcoin Treasuries. The company’s average Bitcoin purchase price is $65,145, a 12% decline since its first investment on April 23.

The metaplanet shares the increase

Data from Google Finance reveals that Metaplanet’s share price has risen more than 300% since it announced its Bitcoin strategy on April 9. It is now trading at $6.11 (893 Japanese yen). However, this price is significantly lower than its annual high of $20.50 (3,000 Japanese yen), reached on July 24.

The fall in the stock price was compounded by the crypto market’s “Black Monday” on August 5, when Bitcoin plummeted 10% in two hours.

Meanwhile, Bitcoin ETF entries have regained momentum, turning net positive on Wednesday, August 7. BlackRock’s IBIT led with $52.5 million in inflows, while Grayscale’s GBTC saw $30.6 million in outflows.

As for the Japanese stock market, it recently suffered its worst one-day drop since 1987 when the Bank of Japan raised short-term government bond rates from 0% to 0.25% on July 31 .

Despite these market fluctuations, Metaplanet previously said it remains confident in Bitcoin’s long-term potential. The company believes that an increase in BTC prices will strengthen its balance sheet, increase asset value and contribute positively to its earnings.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!