Japan’s Metaplanet Sees Massive Stock Gains After Bitcoin Bet
Metaplanet is seeing historic stock gains after adopting Bitcoin as a reserve asset earlier this May. Japan’s profound debt-to-GDP crisis has inspired economic moves with wild potential.
Metaplanet, a Japanese investment advisor, is being hailed as the “Asian MicroStrategy” after its audacious Bitcoin investment strategy has massively paid off.
The name Metaplanet rocketed into global attention from relative obscurity in late May, as it dramatically saw its stock rally by wild leaps. Outperforming every competitor listed on Japan’s stock market, this financial advisor leapt to see an astonishing 158% growth in a single week. For two days in a row, it hit the legal limit on daily gains, putting a halt on all trading until the following day. This stock is currently only available on the Japanese stock market, but its runaway success has even attracted interest in plans to tokenize shares, allowing worldwide investors to gain exposure. How did this success story happen? What are their plans for the future?
An extremely key factor in understanding Metaplanet’s success here is to consider it not in the context of the crypto space worldwide but in contrast to the overall economic situation in Japan. Metaplanet’s history up to this point has not contained any particular focus on Bitcoin or any other asset, but rather Bitcoin presented itself as a radical solution to broader economic woes. To be fair, it doesn’t hurt that Japan has been a generally pro-crypto nation, engaging in international partnerships to develop the industry in previous years. Indeed, even major businesses have taken up Bitcoin as a payment option, along with exchange functionalities, without much apparent prodding. However, several changing circumstances have made the option of embracing Bitcoin all the more enticing.
To put it succinctly, Metaplanet was driven to invest by the spiraling debt crisis in Japan. When it first formally endorsed Bitcoin, it was quite clear in its public statement: “Metaplanet has adopted bitcoin as its strategic reserve asset. The move is a direct response to sustained economic pressures in Japan, notably high government debt levels, prolonged periods of negative real interest rates, and the consequently weak yen." In other words, the firm chose to use Bitcoin as a store of value over its own country’s currency, a particularly large-scale example of a trend usually undertaken by private citizens in countries experiencing hyperinflation.
Japan may not be in a period of hyperinflation at the moment, but there are certainly a number of troubling warning signs for a successful Japanese business. First of all, Bitcoin has consistently been at an all-time high compared to the Japanese yen this year, first hitting records in February. It’s little coincidence that the government moved to allow capital firms to hold cryptoassets at the same time, a debate that is currently a hot issue in the US several months later. There are a variety of telltale signs of economic doldrums for Japan, but the most pressing is the insane debt-to-GDP ratio, currently the highest in the developed world. Japan’s government spending has been more than double its GDP for 15 years at this point, and it currently sits at over 250%. Although the yen is not currently in freefall, this is an extremely bad sign.
The canaries in the coal mine are chirping, and Metaplanet is far from the only Japanese firm that has turned to Bitcoin as a store of value. Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund by assets under management, made headlines in March when it began investigating the possibilities of using Bitcoin as a store-of-value. However, although GPIF hasn’t pulled the trigger on any sort of wide-scale Bitcoin investment, Metaplanet began quietly making multimillion-dollar Bitcoin purchases in April. After more than a month of this, it made the official announcement in mid-May that it was officially using Bitcoin as a reserve asset. In the two weeks since that day, its stock price has taken historic leaps.
In other words, although comparisons to MicroStrategy have been omnipresent in media coverage, Metaplanet first came to embrace Bitcoin for some wildly different reasons. Michael Saylor took a very controversial leap when he led his company to purchase large amounts of Bitcoin, whereas Metaplanet was in good company with state-run pension funds in examining the same decision. Nevertheless, its position when it began making its first purchases in April is very different from the lofty heights it now occupies, and the strategy has adapted in turn. After all, MicroStrategy saw a 500% return on its Bitcoin investment, and its stock price even outperformed Bitcoin in 2023. MicroStrategy’s longterm trajectory has been permanently altered by Bitcoin, and Metaplanet is likely to see a similar experience.
For one thing, Metaplanet hired Bitcoin analyst and advocate Dylan LeClair as a Director of Bitcoin Strategy less than a week before its official embrace of the currency, and LeClair has since claimed in interviews that new Bitcoin acquisitions are a top priority. “We will explore various options for acquiring additional Bitcoin, including any opportunities present in capital markets that we view as accretive,” said LeClair, as “we believe this to be the most valuable thing we can do for our shareholders." These statements are not indicative of a firm that is tepidly or reluctantly using Bitcoin to suit its needs, but one that is becoming more actively bullish as it acquires new notoriety.
Now that Bitcoin maximalism is on the menu, the sky is truly the limit for Metaplanet. Already, the firm has announced a new plan: the creation and sale of new shares to raise capital, and the investment of this capital directly into fresh Bitcoin purchases. This method of leveraging bullish hype around Bitcoin’s success into stock gains and new actual Bitcoin seems straight out of MicroStrategy’s book, and it’s a large part of how this American firm outperformed Bitcoin while also holding 1% of its circulating supply. This process is far more roundabout and indirect than an ETF, but it does readily convert Bitcoin excitement into concrete gains. In any event, Arthur Hayes has identified the weak yen as a major opportunity for Bitcoin growth, and Metaplanet is just one piece of the dynamic.
It’s anyone’s guess as to how far Metaplanet will go with its victories from here. The firm has already been transformed by a very recent decision to invest in the world’s leading cryptocurrency, and it doesn’t show any signs whatsoever of slowing down. As far as an international investor is concerned, talks are only just beginning for the scheme of tokenizing shares to allow global access. Regardless of how that plan goes, however, it’s indicative of a larger trend. Japan is a developed economy with an innovative tech industry and no shortage of potential investment. Nevertheless, its debt crisis is the most severe in the developed world, and this radical problem has inspired radical solutions. It’s very unlikely that Metaplanet will be the only firm to turn to Bitcoin as a way out of these doldrums, especially considering this company’s very public success. Moving forward, Japan is likely to be a real hotbed of activity in the future, and all of it seems very positive for Bitcoin.
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