Metaplanet Boosts Bitcoin Holdings After Liquidating and Rebuying

Metaplanet, a Japanese bitcoin treasury firm, executed a bold liquidity demonstration in Q3 2023. The company sold 10,000 BTC for ¥124.7 billion ($790 million) before quickly buying back 11,000 BTC for ¥149.9 billion ($950 million). This strategic move netted a 1,000 BTC increase, bringing Metaplanet's total holdings to 44,000 BTC. The exercise showcased the firm's ability to convert bitcoin into cash when needed, a key factor as it pursues a credit rating and expands financing options.

The sale generated proceeds exceeding the firm's outstanding liabilities, yet Metaplanet retained these obligations. The buyback was conducted at a price below the firm's acquisition cost, creating a capital loss for U.S. tax purposes. Metaplanet estimates a potential deferred tax asset of approximately $97 million, though this figure remains unconfirmed by its auditor. The loss could offset future capital gains in the U.S.

Metaplanet also unveiled a new net interest income strategy, aiming to invest capital raised from perpetual preferred stock, corporate bonds (BitBonds), and a bitcoin-collateralized credit facility. The firm plans to allocate 85% to 90% of its assets to bitcoin, with the remainder earmarked for strategic investments, including M&A and asset management. The company's bitcoin income generation business brought in ¥848.4 million ($5.4 million) in Q3, though progress fell short of initial expectations.

Despite this, Metaplanet's full-year earnings forecast remains unchanged. The firm's total holdings make it the second-largest public bitcoin treasury company after Michael Saylor's Strategy, according to Bitcoin Treasuries data. This strategic positioning underscores Metaplanet's commitment to expanding its financial footprint in the crypto space.