Japan’s Metaplanet Secures $6.8M Loan to Boost BTC Holdings Amid Economic Uncertainty

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Japanese investment firm Metaplanet is making headlines with its bold move to expand its Bitcoin holdings. The company has secured a 1 billion Japanese yen ($6.8 million) loan from one of its shareholders, MMXX Ventures. If the entire loan amount is used to purchase Bitcoin, Metaplanet stands to acquire an additional 118.5 Bitcoins at current market prices.

This loan, carrying a remarkably low annual interest rate of 0.1%, will be repaid in a lump sum after six months, starting from August 8. 

Notably, just two days prior, Metaplanet revealed plans to raise $68 million through a stock rights offering, with $58 million earmarked specifically for Bitcoin investments. This aggressive accumulation strategy is similar to MicroStrategy’s approach, which is the largest corporate Bitcoin holder.

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Financial Struggles in Japan

Metaplanet’s aggressive Bitcoin accumulation comes at a time of significant economic turmoil in Japan. The country recently slipped into a recession, losing its position as the world’s third-largest economy to Germany.

This economic downturn was driven by weaker-than-expected domestic consumption, resulting in a 0.5% drop in real gross domestic product (GDP) in the first quarter of 2024 compared to the previous quarter. Additionally, Japan’s GDP was down 1.3% from its peak in the second quarter of 2023.

The prolonged ultra-loose monetary policy maintained by Japan’s central bank for over a decade has also come under scrutiny. As the country’s economic challenges mount, there are increasing questions about when the central bank will shift from its ultra-loose monetary policy.

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Metaplanet and Bitcoin

Metaplanet’s journey into Bitcoin began as a hedge against Japan’s escalating debt and the rapidly depreciating yen. The company had been struggling with its finances, described as a “zombie” company by its CEO, Simon Gerovich, during the Bitcoin 2024 conference in late July.

Gerovich shared his challenges in cleaning up Metaplanet’s balance sheet and paying down debt. He realized that Bitcoin, the “apex monetary asset,” could provide a viable path to long-term success for the firm.

To date, Metaplanet has purchased 246 Bitcoins, valued at $13.95 million at current market prices, through seven separate shoppings. However, the firm’s average purchase price of $65,145 means it is currently down 12.8% on its Bitcoin investment. Despite this, Metaplanet remains undeterred.

The recent “Black Monday” downturn saw Bitcoin’s price drop significantly, but it has since stabilized between $55,000 and $57,000. Bitcoin’s market capitalization has also rebounded, climbing to $1.12 trillion today.

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