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Japan’s financial landscape is facing challenges, prompting Metaplanet, a publicly traded company, to turn to Bitcoin. Metaplanet’s board has approved a significant investment of 1 billion yen (approximately USD 6.26 million) in Bitcoin, funded by proceeds from its second issuance of ordinary bonds, which carry an annual interest rate of 0.5% and mature in June 2025.
Motivation Behind the Move
Metaplanet’s decision is part of a broader strategy to mitigate risks associated with Japan’s substantial debt and the resulting yen volatility. Japan’s net debt to GDP ratio was the highest among G7 countries in 2023, standing at approximately 159%. This move mirrors the strategy adopted by MicroStrategy, the U.S. company known for its large Bitcoin holdings.
Additional Bitcoin Purchases
On June 11, Metaplanet expanded its Bitcoin reserves by purchasing an additional 23.351 Bitcoins worth $1.6 million at an average price of 10,706,180 yen per Bitcoin. This brings Metaplanet’s total Bitcoin holdings to 141.0727 Bitcoins, valued at 1.45 billion yen. The company’s average acquisition price is 10,278,391 yen per Bitcoin.
Strategic Shift and Future Plans
Metaplanet’s embrace of Bitcoin as a reserve asset aims to reduce exposure to the yen and hedge against Japan’s debt burden. The company plans to raise an additional ¥935 million (about €5 million) through “Stock Acquisition Rights” to purchase more Bitcoin, following the trend of U.S. companies diversifying into cryptocurrencies.
Market Implications
The significant adoption of Bitcoin by institutional investors has resulted in the notable decline of BTC on centralized exchanges in the recent past. According to on-chain data, there’s widespread FUD among traders regarding Bitcoin as its price fluctuates between $65,000 to $66,000. Despite this negative sentiment, whales are accumulating Bitcoin, which historically precedes price rebounds. This suggests that patient traders may be rewarded with potential market gains in the near term.