Metaplanet Inc. has taken out $100 million in loans against its Bitcoin holdings, hoping to use that money to buy more Bitcoin and underpin operations.
The Tokyo-listed company reportedly executed the loan at the end of October under an existing credit facility, signaling its continued commitment to Bitcoin as a core asset.
More Bitcoins
Based on reports, the borrowing was completed on October 31 and represents roughly 3% of Metaplanet’s total Bitcoin holdings. The firm currently owns around 30,823 BTC, valued between $3.3 billion and $3.5 billion late last month.
The lender’s identity remains undisclosed, though the loan carries a floating interest rate tied to US dollar benchmarks plus an additional spread.
Balance Sheet Plans And Buybacks
Metaplanet has indicated that the funds will go toward acquiring more Bitcoin and supporting revenue-generating strategies linked to its holdings.
The company also has a ¥75 billion share buyback plan—about $500 million in total. Based on reports, the management believes borrowing against Bitcoin allows the firm to strengthen its position without selling existing assets.
Bitcoin As Treasury Asset
Analysts say the move reflects a growing trend of companies treating Bitcoin as a treasury asset, rather than a purely speculative investment, but it clearly carries risks.
A sharp drop in Bitcoin’s price could reduce the value of the collateral, forcing the company to add more collateral or unwind part of its position.
Although the $100 million amount is a small element of its total value in Bitcoin, critics say adding debt to a volatile balance sheet will create financial stress.
Reports also brought to spotlight how the market value of Metaplanet sometimes retreated below the valuation of the Bitcoin it holds, indicating weaker investor sentiment.
Still, the company continues to explore income-producing plans like Bitcoin options trading to generate returns that are beyond price appreciation.
Deep Trust In Crypto
Market observers are now focusing on how fast the company will put to use the borrowed funds to purchase additional crypto and whether more borrowing will follow.
Changes in Bitcoin’s market price, as well as potential guidance from Japanese regulators, may also impact future decisions.
For now, this $100 million loan is a bold demonstration of Metaplanet’s deep conviction in Bitcoin and possibly sets an example for other firms exploring crypto-backed financing.
Featured image from Unsplash, chart from TradingView
