Metaplanet’s $651M Bitcoin Loss Tests Corporate Crypto Strategy

Metaplanet Inc., the Tokyo-listed company that transformed from hotel operations to Bitcoin accumulation, now sits on a staggering $651 million paper loss from its 30,823 BTC position. According to analyst Shanaka Anslem Perera, the firm acquired its Bitcoin holdings at an average price of $108,036 per BTC, but with the cryptocurrency trading around $87,500 as of November 26, the unrealized losses have contributed to an 81% decline in the company’s stock price since June.

The financial paradox is striking: while Metaplanet’s Bitcoin bet has soured, its core business operations show remarkable strength. Revenue surged 1,700% year-on-year to ¥4.3 billion, with net income hitting ¥13.5 billion for the fiscal year through September. This divergence highlights the complex risk profile of corporate Bitcoin adoption, where traditional business success can be overshadowed by cryptocurrency market volatility.

Metaplanet’s strategy, as analyzed by Perera, relied on what he termed ‘reflexivity’ – a virtuous cycle where Bitcoin price increases would boost the company’s stock, enabling equity issuance to buy more BTC. This mechanism functioned effectively when the stock traded at a premium to the firm’s Bitcoin holdings, but collapsed when the stock began trading below this value.

By late November, Metaplanet’s multiple-to-net-asset-value (mNAV) had fallen to 0.88, making traditional equity issuance destructive to existing shareholders. The breakdown of this reflexivity model exposes the fundamental vulnerability of corporate Bitcoin strategies during extended market downturns, where the very mechanism designed to amplify gains becomes a source of shareholder value destruction.

Facing this capital-raising challenge, Metaplanet launched the ‘MERCURY’ perpetual preferred equity instrument on November 20, featuring a 4.9% dividend and a ¥1,000 conversion price. The December 22 shareholder vote will determine whether approximately ¥21.25 billion of this capital goes live, representing a crucial test of investor confidence in the company’s Bitcoin strategy amid substantial unrealized losses.

The timing coincides with increased regulatory attention in Japan. The Tokyo Stock Exchange operator has signaled possible tighter rules for firms pivoting into digital-asset treasury strategies, following warnings to smaller players this autumn. Metaplanet’s management insists it followed proper governance and shareholder approval processes, positioning itself as the ‘responsible’ version of the corporate Bitcoin model.

Compounding these challenges, the Bank of Japan has shifted away from ultra-cheap money, lifting interest rates to 0.5% – the highest in years – and allowing government bond yields to climb. This monetary policy shift undermines the original thesis that Japanese savers, squeezed by negative real returns and a weak yen, would chase Bitcoin exposure through Metaplanet stock.

Metaplanet’s predicament unfolds against a challenging backdrop for both Japanese markets and the wider crypto ecosystem. Bitcoin has only recently rebounded from dipping below $81,000 and struggles to break out above the high-$80,000s, with on-chain and derivatives data indicating heavy unrealized losses and ongoing whale selling pressure.

The coming four weeks represent a decisive period that will test whether corporate Bitcoin strategies can survive prolonged market weakness. Three converging forces will determine Metaplanet’s fate: the MERCURY preferred share vote on December 22, Bitcoin’s year-end price action, and the extent of regulatory intervention from Japanese authorities. The outcome will provide critical insights into the viability of corporate Bitcoin adoption as a sustainable financial strategy rather than a speculative gamble.