Metaplanet, a Tokyo-listed investment firm recognized for its Bitcoin adoption, announced on Friday (Asia time) that it had added 108.999 Bitcoin worth 1 billion yen to its holdings.
The company’s Bitcoin bet hit $45 million after new Bitcoin purchases. Metaplanet, along with other majors, is stacking some serious BTC.
The purchase increased Metaplanet’s Bitcoin holdings to 748.502, worth about $45 million at current prices. The average price of all Bitcoins owned by Metaplanet is 9,304,655 yen (approximately $62,500) per Bitcoin.
Stacking!
The acquisition comes shortly after the company announced Monday that it had purchased 1 billion yen worth of bitcoin, amid heightened geopolitical tensions that some experts believe are strengthening Bitcoin’s appeal as a global currency.
Metaplanet, often labeled Asia’s MicroStrategy, has been actively purchasing Bitcoin since revealing plans to adopt the cryptocurrency as a core part of its treasury reserves earlier this year. The company said it followed MicroStrategy’s Bitcoin playbook of using Bitcoin as a hedge against national currency volatility.
The Japanese economy is facing ongoing challenges from the end of 2021. By the first half of 2024, the Japanese yen had fallen about 50% against the dollar.
The weakness of the Japanese yen is mainly due to the interest rate differential between Japan and the United States. Japan’s extremely loose monetary policy to stimulate the economy stands in sharp contrast to the Federal Reserve’s more hawkish stance.
The excessive depreciation of the yen was one of the reasons Metaplanet implemented its Bitcoin strategy. At this point, the plan appears to have paid off, with Metaplanet’s stock price soaring more than 400% after several BTC purchases.
Bitcoin was instrumental in helping Metaplanet escape its “zombie company” status. Before adopting a Bitcoin-centric strategy, the company was described as a zombie company struggling to survive financially and suffering due to Japan’s economic climate.
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Metaplanet’s management sees Bitcoin’s potential as a treasury reserve asset. CEO Simon Gerovich aimed to mitigate the risks associated with currency depreciation and capitalize on Bitcoin’s long-term appreciation potential.
Metaplanet plans to continue expanding its Bitcoin holdings. The company announced its intention to acquire an additional 7.5 billion yen (about $50.5 million) worth of Bitcoin by the end of 2024. The company also announced plans to raise additional funds to purchase more Bitcoin through stock underwriting rights.
Don’t panic about Bitcoin price fluctuations
Like MicroStrategy, Metaplanet has continued to invest in the cryptocurrency in recent months despite continued volatility in the Bitcoin market. Bitcoin fell below $59,000 on Thursday after U.S. inflation data turned hotter than expected.
As of this writing, BTC has surged above $60,000, CoinGecko data shows. But analysts warned that near-term pressures were still visible as stagflation concerns resurfaced.
Core inflation rose 3.3% year-on-year, slightly higher than expected, according to the report. Monthly inflation increased 0.2%, with an annual rate of 2.4%. According to a separate report released by the U.S. Department of Labor, the number of new unemployment claims for the week ending October 5 reached 258,000, the highest since August 8 of last year.
Rising inflation and a sluggish labor market could affect the Fed’s decision to cut interest rates. The Federal Reserve recently implemented aggressive interest rate cuts, cutting interest rates by 50 basis points. Analysts believe the Fed has added job growth to its checklist in addition to inflation.
The Federal Reserve is expected to continue adjusting interest rates based on incoming economic data. Forecasts suggest there could be a further cut in late 2024, with odds leaning towards a 25 basis point rate cut. Lower interest rates lead to higher asset prices (including BTC).
Interest rates set by central banks can indirectly affect the price of Bitcoin. Low interest rates may encourage investment in risky assets such as Bitcoin. HODL seems to be everything. Metaplanet is joining in.