Metaplanet Sold 10,000 BTC and Bought 11,000, Analyst Explains Why

Metaplanet's Strategy

Metaplanet's decision to sell 10,000 Bitcoin and repurchase 11,000 at a higher price was aimed at demonstrating the liquidity of its Bitcoin treasury. This move shows that Bitcoin can be monetized when financial obligations require it, according to Simon-Peter Massabni, head of business development at XS.com.

Cost of the Strategy

The strategy came with a cost, as Metaplanet sold Bitcoin at an average price of roughly 12.47 million yen per BTC and later repurchased at about 13.63 million yen. This resulted in an estimated additional cost of approximately 11.6 billion yen compared with buying back the same amount.

Future Plans

Metaplanet plans to maintain roughly 85% to 90% of its assets in Bitcoin while allocating 10% to 15% toward strategic and income-generating investments. The company generated 848.4 million yen ($5.4 million) from Bitcoin-related income-generating operations in the third quarter, although management acknowledged that performance was below initial expectations.

Risks and Challenges

However, Massabni believes that the more difficult test has yet to begin. The strategy's success will depend on whether Metaplanet can secure cheaper financing, generate recurring income, manage risk, and keep increasing its Bitcoin holdings per share, rather than simply growing the absolute size of its assets.