- Japanese firm Metaplanet announced plans to adopt Bitcoin as its core treasury reserve asset, causing its stock price to surge by 90%
- Metaplanet’s move to invest heavily in Bitcoin draws comparisons to business intelligence company MicroStrategy, whose stock has risen nearly 1000% since adding Bitcoin to its reserves in 2020
- Metaplanet deployed around $6.56 million, or nearly half of its market capitalization at the time, towards purchasing Bitcoin
Metaplanet, a Japanese investment firm trading on the Tokyo Stock Exchange, announced on Monday that it has purchased 1 billion JPY (around $6.56 million) worth of Bitcoin to hold as a core reserve asset.
This represents nearly half of the company’s total market capitalization at the time. In a tweet, Metaplanet said the move is “not just about embracing digital assets, but also about pioneering a future where finance meets innovation.”
Investors cheer the Bitcoin pivot
Following the announcement, Metaplanet’s stock jumped 90% from 19 JPY to 36 JPY from Monday to Tuesday. The stock traded 69 million shares on Tuesday, far above its daily average of 928,000 shares.
The sharp rise mimics what has happened to other companies that have added Bitcoin to their balance sheets, most notably business intelligence firm MicroStrategy. Since adopting Bitcoin as its primary reserve asset in August 2020, MicroStrategy’s stock has gained almost 1000%.
Some have called Metaplanet “Asia’s first MicroStrategy” and the move has prompted comparisons between the two companies. According to Sora Ventures founder Jason Fang, Metaplanet’s new product will allow more investors to gain exposure to Bitcoin without regulatory risks.
Bitcoin purchases help bypass regulatory hurdles
Purchasing Bitcoin directly allows Metaplanet to avoid some of the regulatory hurdles facing traditional crypto ETFs in Japan. The country does not yet have a regulated Bitcoin ETF product, though some rules were recently relaxed.
In the US, MicroStrategy’s stock has become a popular way for investors to gain Bitcoin exposure without directly owning the asset. It offers features like low fees and modest leverage.
Metaplanet has not indicated plans to purchase other digital assets like Ethereum. The company operates in a range of industries including real estate and Web3 consulting.
Verdict still out on long-term impact
It remains to be seen whether Metaplanet can replicate MicroStrategy’s prolonged stock surge. MicroStrategy is still up over 100% this year, versus Bitcoin’s 57% gain in 2022.
However, Metaplanet’s embrace of Bitcoin as a reserve asset has clearly resonated with investors looking to gain exposure to the cryptocurrency. The bold move has paid off handsomely, at least in the short term.
