Japanese investment firm Metaplanet reported a sharp drop in its quarterly Bitcoin valuation gains. The company recorded $1.4 billion (10.6B yen) in the third quarter, down 39% from $2.4 billion the previous quarter. This downturn highlights the impact of the market crash on Metaplanet following October’s crash.
Metaplanet announced the figures in its earnings report shared on X (formerly Twitter) this Thursday. Despite the drop, the company reaffirmed its strategy. “The Company’s Bitcoin Treasury Business continues to progress steadily”, Metaplanet said, ensuring its plan does not depend on short-term price fluctuations. The company also reported a $26 million stock amortization cost in Q3, used to gauge the cost of capital.
The pressure on corporate treasuries has been intense. The October market crash, which wiped out $19 billion, has left Metaplanet’s holdings in the red. The firm holds 30,823 BTC, acquired at an average cost of $108,000 per coin. With BTC’s current price around $103,000, “the giant position is now 5% underwater”, according to macro analyst Kashyap Sriram.
Can Metaplanet’s strategy survive regulatory pressure?
To counter this, Metaplanet secured a $100 million Bitcoin-backed loan on October 31. The goal is to use the funds to buy more BTC, thereby lowering its total cost basis. Nonetheless, Metaplanet’s stock has felt the pressure, falling over 27% in the last month. This decline was aggravated by reports that the Japan Exchange Group (JPX) is exploring new restrictions for firms holding cryptocurrencies.
Metaplanet CEO Simon Gerovich has downplayed these concerns. He stated that JPX’s concerns only apply to companies with poor approval processes. Meanwhile, the company maintains its ambitious goal. Metaplanet, known as “Asia’s Strategy,” aims to acquire 210,000 Bitcoin by the end of 2027, primarily through equity financing opportunities.
