By Zhou, ChainCatcher
As the cryptocurrency market navigates a corrective phase, a clear divergence in strategy has emerged among leading Bitcoin treasury companies. Industry titan MicroStrategy (referred to as “Strategy” in the original article) recently announced a significant acquisition, purchasing an additional 10,624 Bitcoins for $962.7 million at an average price of $90,615 per coin. In stark contrast, Metaplanet, the fourth-largest Bitcoin treasury, has unexpectedly halted its accumulation efforts, marking ten consecutive weeks without new Bitcoin purchases since September 30.
Metaplanet, a Japanese-listed company often lauded as “Asia’s MicroStrategy,” was once a fervent advocate for Digital Asset Treasury (DAT) strategies. Since initiating its reserve program in April 2024, the company rapidly amassed over 30,000 Bitcoins, valued at approximately $2.75 billion.
However, as Bitcoin’s price retreated nearly 30% from its all-time high of $126,000 in the fourth quarter, Metaplanet surprised the market. While many anticipated treasury companies would seize the opportunity to buy the dip, Metaplanet pressed pause after its last acquisition on September 29, redirecting its short-term capital focus towards share repurchases.
DAT Sector Shifts from Aggression to Risk Prioritization
Recent data underscores a significant contraction in the digital asset treasury sector, with the total market capitalization of DAT stocks plummeting from $150 billion to $73.5 billion in the fourth quarter. Consequently, most companies saw their market-to-net-asset-value (mNAV) ratios fall below 1x. Bloomberg reported a median decline of 43% in the share prices of US and Canadian-listed crypto asset treasury companies this year, with some experiencing drops exceeding 99%.
Galaxy has warned that Bitcoin treasury companies are entering a “Darwinian phase,” characterized by collapsing stock premiums, leverage turning negative, and DAT stocks trading at a discount. This signals a breakdown of the core mechanisms that once fueled their booming business models.
Against this challenging backdrop, ETHZilla, another second-tier treasury company, recently announced the early redemption of $516 million in convertible bonds. This move is widely interpreted as a positive step towards simplifying its capital structure, enhancing financial flexibility, and mitigating the risks of high-interest debt during a market downturn.
Metaplanet’s actions resonate with this industry-wide shift. Despite holding Bitcoin assets theoretically nine times greater than its $304 million in outstanding debt, the company’s decision to pause accumulation aligns perfectly with the evolving trend within the DAT sector, moving from aggressive accumulation to prioritizing robust risk management.
Tactical Adjustments Driven by Share Price Pressure and Conservative Accounting
Previously, Metaplanet’s stock price soared from $20 in April 2024 to a peak of $1,930 in June 2025, buoyed by its Bitcoin holding strategy. Although the share price has seen a substantial decline of over 70% in the latter half of the year, it still boasts an impressive gain of over 20% year-to-date, currently stabilizing around $420 with a market capitalization of approximately $3 billion.
Addressing the sustained decline in share price, Metaplanet CEO Simon Gerovich publicly responded on October 2. He drew parallels to Amazon during the dot-com bubble, emphasizing that fundamentals and stock prices often diverge, and reaffirmed the company’s commitment to Bitcoin accumulation.
Earlier in September, Gerovich had stated that issuing new shares when net asset value falls below market capitalization (mNAV < 1x) would be "mathematically value-destructive," negatively impacting the company's BTC yield. At that time, he indicated the company would prioritize options like preferred stock and share buybacks.
Consequently, when its mNAV dipped below 1x in early October, Metaplanet swiftly responded. It authorized the repurchase of up to 150 million shares and secured a $500 million credit facility. Subsequently, it raised $100 million by collateralizing its Bitcoin assets, earmarking funds for further Bitcoin purchases, expanding revenue streams, and additional share buybacks. These efforts have successfully restored the company’s mNAV to above 1x.
Viewed through this lens, the pause in Bitcoin accumulation represents a tactical safeguard for its share price and balance sheet health. It prioritizes securing the value for existing shareholders rather than blindly expanding its asset base.
Furthermore, ceasing purchases helps mitigate risks associated with Japan’s conservative accounting standards. Given its average Bitcoin cost of approximately $108,000, Metaplanet has accumulated over $500 million in unrealized losses on its books. To prevent an excessive impact on its short-term profit and loss statement, the company proactively chose to avoid exacerbating this book impairment risk.
Leveraging Low Interest Rates to Forge an Asian “Moat”?
While the pause in Bitcoin accumulation might appear defensive, Metaplanet’s true strategic intent could lie in upgrading and innovating its capital structure.
The company’s third-quarter financial report showcased robust performance: sales reached ¥2.401 billion, a 94% quarter-over-quarter increase; operating profit climbed 64% to ¥1.339 billion; net profit hit ¥12.7 billion; and net assets grew 165% to ¥532.9 billion. Notably, its options business contributed $16.28 million in revenue, a 115% year-over-year increase, sufficient to cover daily operational and interest costs.
Building on this foundation, Metaplanet is also exploring strategies akin to MicroStrategy, planning to issue preferred shares similar to STRC to acquire capital more efficiently.
The company intends to launch two new digital credit instruments, “Mercury” and “Mars.” “Mercury” is designed to offer a 4.9% JPY yield, approximately ten times the return on Japanese bank deposits. Of the funds raised, 73% will be specifically allocated for Bitcoin acquisition, including $107 million for direct purchases and $12 million for options trading. This innovative approach allows Metaplanet to bypass equity dilution, pivot towards low-cost debt leverage, and offers significant appeal to domestic investors.
Moreover, Japanese regulations prohibit “at-the-market” (ATM) sales for listed companies, preventing direct “instant dumping” of shares on the secondary market to protect investors from dilution. Metaplanet ingeniously circumvents this restriction while retaining the core advantage of flexible fundraising through its Mobile Stock Warrant (MSW) mechanism.
The MSW is essentially a special stock acquisition warrant with a unique feature: its exercise price is not fixed but dynamically adjusted periodically. Typically, every few trading days (e.g., every three trading days for Metaplanet’s early series), the exercise price is reset to the average closing price of the preceding days, such as a three-day simple moving average. This allows the company to issue new common shares at a price close to the current market rate when warrant holders choose to exercise, thereby raising capital.
In the future, Metaplanet may integrate this mechanism into its perpetual preferred stock product, Mercury. This would allow preferred shareholders to convert into common shares at a dynamic price via MSW-like conversion terms, making the entire financing process smoother and more controlled.
Crucially, MicroStrategy Executive Chairman Michael Saylor has confirmed that his company will not launch a similar product in Japan within the next 12 months. This provides Metaplanet with a valuable 12-month first-mover advantage in the market.
The company successfully issued $150 million in Class B perpetual preferred stock on November 20, demonstrating the implementation of its financing strategy. These actions suggest that Metaplanet is strategically leveraging Japan’s low-interest rate environment to construct a unique financing “moat,” paving the way for structured and sustainable expansion.
Domestic Advantages and MSCI Scrutiny
Metaplanet’s core value proposition, in fact, lies in the unique “alpha” generated by its Japanese ecosystem:
On one hand, the persistent depreciation of the Japanese Yen reinforces Bitcoin’s role as an inflation hedge. Metaplanet’s Bitcoin reserves offer domestic Japanese investors an effective avenue to counter the erosion of the Yen’s purchasing power.
On the other hand, the tax-exempt benefits of Japan’s NISA (Nippon Individual Savings Account) have attracted 63,000 Japanese domestic shareholders to Metaplanet. Compared to the 55% capital gains tax on direct cryptocurrency holdings, investing in Metaplanet shares via NISA allows investors to gain indirect BTC exposure at a significantly lower cost.
This unique positioning has garnered international institutional recognition. Capital Group has increased its stake to 11.45%, becoming Metaplanet’s largest shareholder. The top five shareholders also include MMXX Capital, Vanguard, Evolution Capital, and Invesco. Richard Byworth, partner at Syz Capital, publicly divested from MicroStrategy and Bitcoin to invest in Metaplanet, citing the latter’s lower financing costs and higher return elasticity.
An industry observer noted that companies like Metaplanet must prioritize financial resilience during downturns to sustain their long-term accumulation goals.
However, despite the long-term benefits for structural health, Metaplanet faces potential short-term selling pressure. For instance, the MSCI index rebalancing, which impacted MicroStrategy, also extends to Metaplanet. Having been included in the MSCI Japan index in February of this year, a potential exclusion due to a high proportion of Bitcoin assets could trigger a wave of passive fund sell-offs.
Conclusion
In summation, Metaplanet’s decision to pause Bitcoin accumulation should not be viewed as a strategic failure or a capitulation to market forces. Instead, it represents a calculated strategic pause, driven by considerations of risk and efficiency. This move also signifies the maturing trajectory of the DAT sector, transitioning from aggressive accumulation to a paradigm where risk management takes precedence.
Matt Hougan, Chief Investment Officer at Bitwise, once stated that evaluating DAT companies solely by mNAV is flawed, as this valuation method fails to account for the lifecycle of a listed company. The reasons for DATs trading at a discount are often clear, while the reasons for a premium are frequently uncertain. Looking ahead, the price disparities among treasury companies are likely to become more pronounced. Metaplanet, it seems, is actively re-engineering its valuation framework for the future.
(The above content is an authorized excerpt and reproduction from our partner PANews, original link | Source: ChainCatcher)
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