TLDR
- Metaplanet reported a 39% drop in Bitcoin valuation gains for the third quarter of the year.
- The company’s Bitcoin holdings are currently 5% underwater due to the drop in market value.
- Metaplanet plans to acquire 210,000 Bitcoin by the end of 2027 through equity financing.
- Metaplanet raised a $100 million Bitcoin-backed loan to reduce its average acquisition cost.
- The company’s stock has fallen over 27% in the last month and 6.5% in the past five days.
- Metaplanet’s CEO Simon Gerovich dismissed concerns over new regulations from Japan Exchange Group.
Metaplanet, a Japanese investment company, reported a sharp drop in its Bitcoin valuation gains for the third quarter of the year. The company recorded $1.4 billion in gains, a 39% decrease from the previous quarter’s $2.4 billion. This downturn follows the October crypto market crash, which has weighed on corporate Bitcoin treasuries.
Bitcoin Treasury Business Continues Steady Progress Despite Market Volatility
Metaplanet’s Bitcoin Treasury Business continues to operate in line with its long-term plans. Despite the recent drop in valuation gains, the company emphasized that it is not reliant on short-term price fluctuations.
“The Company’s Bitcoin Treasury Business continues to progress steadily in line with plan and is not dependent on short-term price fluctuations,” Metaplanet stated in its report.
The company owns a large Bitcoin portfolio, consisting of 30,823 bitcoins. Metaplanet acquired these coins at an average price of $108,000 each, which puts its position 5% underwater at the current Bitcoin price of $103,000. This situation highlights the challenges Metaplanet faces, as current market conditions are causing its holdings to lose value.
Despite these challenges, Metaplanet remains confident in its long-term strategy. The company aims to acquire 210,000 Bitcoin by the end of 2027, using equity financing opportunities to increase its holdings. This ambitious goal reflects Metaplanet’s commitment to Bitcoin as a core part of its investment strategy.
Bitcoin-backed Loan Raises Concerns as Metaplanet Struggles with Market Conditions
In an effort to manage its position, Metaplanet raised a $100 million Bitcoin-backed loan in October. The loan, secured by the company’s Bitcoin holdings, was designed to help Metaplanet lower its average acquisition cost. Despite the move, some analysts have criticized the company’s decision, citing the risks associated with leveraging Bitcoin assets in such a volatile market.
Metaplanet’s stock price has also been under pressure, falling by more than 27% over the past month and by more than 6.5% over the past five days. The company’s struggles come in the wake of the October 10 crypto market crash, which saw $19 billion wiped out. Reports of potential new restrictions on crypto-holding firms from Japan Exchange Group (JPX) have added further pressure on Metaplanet’s stock.
Despite these setbacks, CEO Simon Gerovich dismissed concerns about the new JPX regulations. He stated that the new restrictions only apply to companies that have failed to meet proper governance standards. This response from Gerovich aims to reassure investors that Metaplanet complies with regulatory requirements.
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