Metaplanet Secures $130M Bitcoin-Backed Loan, Expands BTC Strategy

Metaplanet Secures $130M Bitcoin-Backed Loan

Metaplanet, a Tokyo-listed company focused on Bitcoin, continues to expand its cryptocurrency strategy by securing an additional $130 million loan backed by Bitcoin. This new funding aims to accelerate Bitcoin (BTC) purchases, develop income-generating strategies, and potentially repurchase shares.

Details of the New Loan

On Tuesday, Metaplanet announced that it executed the loan on November 21 under a previously announced credit facility. This borrowing represents part of the company's $500 million credit line, which allows it to increase short-term liquidity using Bitcoin as collateral. With this new funding, the total loans the company has obtained from this facility amount to $230 million, up from $100 million disclosed earlier on October 31.

Risks and Resilience

The company acknowledged that borrowing against Bitcoin exposes it to collateral calls if the price of Bitcoin falls. However, it expressed confidence in the size of its reserves, stating that they are large enough to withstand fluctuations. Metaplanet wrote: "Given the large size of Bitcoin holdings compared to the loan amount, the company expects to maintain sufficient collateral space."

Dual Funding Strategy

Metaplanet's recent loans highlight its dual funding strategy, built around debt and equity instruments to fuel the continuous accumulation of Bitcoin. On the one hand, the company's $500 million Bitcoin-backed credit facility allows Metaplanet to obtain flexible liquidity on demand, secured by its Bitcoin reserves. This allows the company to expand its Bitcoin income program, buy more Bitcoin, and support share repurchases without issuing new shares. In addition to the credit line, there is another plan to raise $135 million through the issuance of Class B perpetual preferred shares. Unlike the short-term, easy-to-repay structure of the credit facility, preferred shares represent long-term financing capital. Investors who purchase the shares receive a fixed annual return, can convert them into ordinary shares, and in some cases, the company can repurchase them if certain conditions are met. The dual channels indicate that Metaplanet is using both collateralized borrowing and specialized share issuance to expand its Bitcoin treasury strategy, even during periods when its holdings are at an unrealized loss.

Holding Bitcoin Despite Unrealized Losses

Data from BitcoinTreasuries.NET shows that Metaplanet is incurring an unrealized loss of nearly 20% on its Bitcoin investments. The company purchased Bitcoin at an average cost of $108,036, while the current Bitcoin price is around $87,000. Despite this, the company continues to hold Bitcoin and accumulate more. Bitcoin strategy director Dylan LeClair said on X that the company is "holding".