Metaplanet Stock Rises 10% Amid New Bitcoin Holdings Increase

Key Takeaways:

• Metaplanet bought 23.25 Bitcoins (worth $1.59 million), raising its total holdings to 141.07 BTC ($9.6 million).
• The company's stock price rallies 10.8% after the news.
• Metaplanet uses Bitcoin as a hedge against Japan's economic challenges.

Metaplanet is a Japanese company that offers technology and consulting services to businesses that want to adopt Bitcoin as a reserve asset.

The company announced the purchase of approximately $1.59 million worth of Bitcoin on June 11, 2024. Metaplanet acquired 23.25 Bitcoins at an average price of $65,365 per Bitcoin. This acquisition increased Metaplanet's total Bitcoin holdings to 141.07 Bitcoin. 

Following this announcement, Metaplanet stock experienced moderate growth. 

According to Google Finance data, Metaplanet stock rose 10.8% to 92 Japanese yen ($0.59) before settling at 89 Japanese yen ($0.57) at midday on June 11 on the Tokyo Stock Exchange. 

Metaplanet stock shot up to 92 Yen.

This marks a notable increase in share value, as the firm’s shares have nearly quintupled since it announced its Bitcoin investment strategy on April 8, 2024. For investors, owning Metaplanet shares provides upsides without worrying about Japan's tax on unrealized crypto gains.

Today, we're thrilled to announce a groundbreaking shift in our financial strategy, as we embrace Bitcoin as the core treasury asset of the Company going forward by committing an initial JPY 1 billion. This strategic pivot is not just about embracing digital assets but also about… pic.twitter.com/OASxj9IBPG

— Metaplanet Inc. (@Metaplanet_JP) April 8, 2024

Metaplanet made its first Bitcoin purchase on April 23, 2024, acquiring 97.85 BTC. Two weeks later, the company snapped up an additional 19.87 BTC. 

Drawing parallels with MicroStrategy, the largest corporate Bitcoin holder, Metaplanet disclosed a commitment to utilize all available capital market instruments to support and grow its Bitcoin reserves. 

Related: Fidelity Executives Backs Bitcoin Allocations.

For many in the financial markets, MicroStrategy is considered a proxy for Bitcoin. The Virgina-based analytics company holds 214,400 Bitcoins, valued at $15.34 billion. The portfolio has yielded a paper profit of $7.76 billion. With an average purchase price of $35,372.59 per Bitcoin, MicroStrategy's BTC investment has proven a wise choice.

Can Bitcoin Shield Businesses Against Economic Uncertainty?

Metaplanet's investment in Bitcoin positively impacts the company's business in Japan by hedging against the yen's depreciation and inflation. 

A weaker yen would attract more overseas investments and increase capital flow, supporting market stability.

Inflation rose much faster in the United States, the Eurozone, and the United Kingdom than in Japan post-COVID-19. Western central banks responded by raising interest rates, widening the rate differentials between these regions and Japan. 

This led to capital outflows and caused the yen's real effective exchange rate to plummet to its lowest downtrend in over 50 years by September 2023.

The weakened yen resulted in higher import and consumer prices, while the costs of oil, natural gas, food, and other commodities soared following the war in Ukraine, further driving inflation. 

The Japanese yen has depreciated nearly 35% against the US dollar since January 2021, while Bitcoin has appreciated almost 200% against the yen in the past 12 months.