Japan's Metaplanet Purchases Bitcoin in Bulk with 208 Billion Won Interest-Free Bonds, Achieving 349% Return

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Tokyo Stock Exchange-listed company Metaplanet has issued 30 billion yen (approximately $208 million) in interest-free bonds to purchase 1,005 new BTC by June 30, 2025, thereby increasing its total holdings to 13,350 BTC (over $1.4 billion at current prices).

According to Cryptopolitan on the local date, Metaplanet announced the issuance of 30 billion yen (approximately $208 million) in interest-free bonds to purchase 1,005 new BTC by June 30, 2025.

The company also plans to raise over $5.4 billion through the "555 Million Plan" to acquire up to 210,000 BTC by 2027. If successful, Metaplanet would control approximately 1% of all existing BTC and become the world's second-largest corporate BTC holder.

CEO Simon Gerovich stated that the company's BTC strategy has already yielded a 349% return compared to the beginning of the year, and investors have responded enthusiastically.

Metaplanet supporters argue that using 0% bonds provides access to "free" capital without issuing new shares or paying high interest, but critics say the company's approach is too dependent on BTC price increases. They warn the community that if cryptocurrency experiences a sharp decline (as has happened multiple times before), Metaplanet could face significant book losses, decreased investor confidence, and potential difficulties in bond obligation repayment.

Metaplanet has attracted attention by raising approximately 30 billion yen through interest-free bonds (about $208 million). The company can now access a large capital pool without immediate costs, shareholder dilution, or long-term interest obligations.

The private institutional investor EVO Fund underwrote the entire bond offering at 0% interest, demonstrating increasing institutional interest in BTC-based strategies in Japan, where investors seek alternative value stores due to extremely low interest rates and a weakening yen. This could also be a bet that Metaplanet's BTC holdings will appreciate over time, increasing the company's valuation and ability to repay principal at bond maturity.

Metaplanet first allocated part of the $208 million to repurchase and amortize one of its previous bond series worth 17.5 billion yen (about $12 million) at an annual interest rate of 0.36%, then purchased new BTC. The remaining proceeds were used to buy 1,005 new BTC at an average price of $107,601 per coin, totaling approximately $108 million. The company now holds 13,350 BTC, surpassing well-known corporate holders like Tesla and Galaxy Digital.

Metaplanet's holdings have quadrupled from just 3,350 BTC three months ago to 13,350 BTC, and the company plans to more than double its current position within the next six months, aiming to reach about 30,000 BTC by the end of 2025.

The company aims to increase this figure to 100,000 BTC by the end of 2026 and accumulate 210,000 BTC (1% of all existing BTC) by 2027. Metaplanet plans to raise $5.4 billion under the "555 Million Plan" through bond issuance, private investments, and other capital market instruments to fund this massive accumulation effort.

While interest-free bonds may have no interest, they still represent a debt obligation that must be fully repaid at maturity.

As BTC is an unproductive asset that generates no income, pays no dividends, or provides intrinsic returns unless sold, Metaplanet lacks recurring revenue streams from these holdings to help repay bond debt. The company is essentially betting that BTC's value will rise sufficiently to cover principal repayment and provide substantial profits by bond maturity.

If BTC steadily increases over the next two years, Metaplanet could sell only a tiny fraction of its holdings at higher prices, fully repay the interest-free debt, and maintain most of its position, potentially doubling or tripling its book net asset value.

However, if BTC prices stagnate or drop significantly, the company will still have outstanding debt while its core asset depreciates on the balance sheet. This scenario would weaken Metaplanet's balance sheet and investor narrative, requiring liquidation of some holdings at a loss.

The collapses of Archegos Capital, the Terra-Luna death spiral, or even WeWork's implosion under unsustainable growth promises are warning examples of broader risks faced by companies that excessively borrow to invest in non-income-generating assets.

Each case demonstrates how aggressive financial engineering and optimistic growth prospects can mask deeper vulnerabilities that only become visible when external conditions change. They also expose how quickly investor confidence can turn to panic when expectations are not met, especially when debt is involved.

Metaplanet's capital strategy assumes BTC is a sound store of value and a high-growth asset that will appreciate enough to cover long-term debt obligations. The combination of a declining asset and fixed debt repayment schedules that could trigger a liquidity crisis or sharp investor confidence drop poses significant risks to the company's BTC confidence.

If capital markets tighten or institutional sponsors become less willing to underwrite interest-free debt for crypto-centric companies, Metaplanet may face serious difficulties in refinancing future obligations.

Similarly, as the company increases its Bitcoin holdings and debt obligations, it is in an increasingly vulnerable position where even a small mistake could trigger a thorough investigation. If Japanese financial regulators begin to question the prudence of allowing listed companies to fund large speculative bets with zero-cost leverage, the regulatory tone could quickly change.

After MetaPlanet disclosed that it raised millions of dollars through interest-free bonds and used most of it to purchase another 1,005 BTC, investors immediately raised the company's stock price by almost 10%, indicating high confidence in MetaPlanet's Bitcoin strategy, at least in the short term.

In an environment where many companies are maintaining caution about digital assets, MetaPlanet is announcing ambitious goals, raising capital to purchase more BTC, and presenting a roadmap that could hold up to 210,000 BTC by 2027. The company's boldness has attracted media and investor attention, especially among those who see Bitcoin as undervalued or believe it could someday replace fiat currency as the world's dominant value store.

However, MetaPlanet's profits are only realized when Bitcoin prices remain high. If Bitcoin prices suddenly drop by 20% or 30%, the company's balance sheet could be quickly impacted, and the same investors currently supporting its strategy could easily retreat, driving down the stock price in the process.

While MetaPlanet's stock has certainly performed well, the question is whether its current valuation reflects long-term value or short-term speculation. The market seems to be giving MetaPlanet some room for doubt.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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