Key Insights
- Metaplanet Inc. secures a $6.8 million loan to purchase additional bitcoin.
- The company plans to allocate nearly the entire loan amount towards acquiring the cryptocurrency, aligning with its long-term bullish stance.
- Metaplanet’s move comes as it seeks to hedge against economic challenges in Japan, including high government debt and weak currency, by increasing its strategic bitcoin holdings.
TOKYO (MarketsXplora) – Japanese investment firm Metaplanet Inc. has taken out a 1 billion yen ($6.8 million) loan to increase its bitcoin holdings, reaffirming the company’s long-term bullish stance on the cryptocurrency.
In an announcement on Thursday, Metaplanet said its board of directors resolved to secure the loan with a 0.1% annual interest rate, adding that “nearly the entire loan amount” will be used to purchase bitcoin.
“Holding Bitcoin as a core asset aligns with Metaplanet’s long-term growth strategy and is expected to significantly enhance the company’s profitability and corporate value,” the Tokyo-listed firm stated.
The move comes just days after Metaplanet revealed plans to raise 10 billion yen ($68.4 million) through a gratis allotment of stock acquisition rights, with the majority of the funds earmarked for bitcoin purchases.
“Our basic policy is to hold Bitcoin long-term; however, if we utilize Bitcoin for operations, the applicable Bitcoin balance will be recorded as a current asset on the balance sheet,” the company said.
Metaplanet’s decision to expand its bitcoin holdings is a direct response to economic pressures in Japan, including high government debt levels, prolonged periods of negative real interest rates, and the consequent weakness of the yen, the firm said in May when it first announced the adoption of bitcoin as a strategic treasury reserve asset.
The announcement comes amid a broader downturn in the Japanese stock market, with the Nikkei 225 index plunging 12.4% on Monday – its worst day since 1987. While the index closed down 0.74% on Thursday, Metaplanet’s stock bucked the trend, closing 20.2% higher.
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Analysts suggest Metaplanet’s embrace of bitcoin as a core asset reflects a broader trend among Japanese firms seeking to hedge against economic uncertainties and leverage the potential long-term appreciation of cryptocurrencies.