Why isn't Asia's largest Bitcoin treasury company, Metaplanet, buying the dip?

Author: Zhou, ChainCatcher

As the cryptocurrency market enters a correction window, the actions of Bitcoin treasury companies show clear divergence. The giant Strategy announced last week that it invested $962.7 million to acquire an additional 10,624 bitcoins at a price of $90,615 per bitcoin. In contrast, the fourth-largest Bitcoin treasury company, Metaplanet, has come to a halt; since September 30, it has not made any additional purchases for ten consecutive weeks.

Metaplanet, a Japanese publicly listed company praised by the market as the “Asian version of MicroStrategy,” was once a radical leader in the DAT (Digital Asset Trust) space. Since launching its reserve plan in April 2024, the company has rapidly accumulated over 30,000 bitcoins, valued at approximately $2.75 billion.

However, since the fourth quarter, Bitcoin prices have retreated nearly 30% from the all-time high of $126,000. While the market generally expects treasury companies to buy the dip, Metaplanet, after completing its last purchase on September 29, unexpectedly pressed the pause button and shifted its short-term capital focus toward stock buybacks.

DAT Shifting from Aggressive Accumulation to Risk Control Priority

Data shows that the total market value of digital asset treasury stocks shrank sharply from $150 billion to $73.5 billion in the fourth quarter, with most companies’ mNAV falling below 1x. According to Bloomberg, the stock prices of listed crypto treasury companies (DAT) in the US and Canada have plummeted this year, with median declines of 43%, and some companies dropping over 99%.

Galaxy warned that Bitcoin treasury companies are entering a “Darwinian phase,” with stock premiums collapsing, leverage declining, and DAT stocks turning undervalued. The once-flourishing core business model is collapsing.

Against this market backdrop, ETHZilla, another company in the second tier of treasury firms, recently announced it would redeem a total of $516 million in convertible bonds early. This move is seen as a positive signal for simplifying capital structure, enhancing financial flexibility, and reducing the risk of high-interest liabilities during market downturns.

Metaplanet’s actions echo this trend. Currently, the company has $304 million in unpaid debt. Theoretically, it holds nine times that amount in Bitcoin assets as collateral, but it still chose to pause its purchases. This behavior aligns with the industry trend of transitioning from aggressive accumulation toward risk control in the DAT sector.

Stock Price Pressure and Tactical Adjustments under Conservative Accounting

Previously, influenced by its Bitcoin holding strategy, Metaplanet’s stock price soared from $20 in April 2024 to a peak of $1,930 in June 2025. Despite a sharp decline of over 70% in the second half of the year, the overall increase remains over 20%, with the current stock price around $420 and a total market cap of approximately $3 billion.

In response to the continued decline in stock price, CEO Simon Gerovich publicly addressed the volatility on October 2. He cited Amazon’s case during the internet bubble era, emphasizing that fundamentals often diverge from stock prices, and reaffirmed the company’s intention to continue accumulating Bitcoin.

Earlier, in September, he stated that if net asset value (mNAV) falls below the market value (mNAV less than 1x), issuing new shares would “mathematically destroy value,” which is detrimental to the company’s BTC returns. The company would prioritize evaluating options like preferred shares and stock buybacks.

Thus, when facing a net asset value breach in early October, Metaplanet quickly took action: authorized a buyback of up to 150 million shares with a $500 million credit line, then raised $100 million by pledging its Bitcoin assets for further Bitcoin purchases, expanding its income-generating activities and share repurchases. Some funds are also allocated to yield-generating operations. Currently, the company’s mNAV has rebounded above 1x.

This behavior of pausing additional purchases is a tactical protection of its stock price and balance sheet health, prioritizing existing shareholders’ value rather than blindly expanding the asset base.

Additionally, halting purchases also aims to avoid risks associated with Japan’s conservative accounting standards. Given its average Bitcoin cost of around $108,000, the company has accumulated unrealized losses exceeding $500 million on its books. To prevent excessive short-term profit and loss impacts, it actively avoids exacerbating this impairment risk.

Leveraging Low-Interest Rates to Build an “Asian Moat”?

On the surface, pausing purchases appears to be defensive. In reality, Metaplanet’s core strategic intent might lie in capital structure upgrades and innovation.

The company’s Q3 financial report shows revenue of ¥2.401 billion, a 94% quarter-over-quarter increase; operating profit of ¥1.339 billion, up 64%; net profit of ¥1.27 billion; and net assets of ¥532.9 billion, up 165%. Notably, its options business contributed $16.28 million, a year-over-year increase of 115%, which can cover daily operations and interest costs.

Building on this, Metaplanet is also attempting to emulate Strategy by planning to issue preferred shares similar to STRC to more efficiently raise capital.

The company plans to launch two new digital credit tools, “Mercury” and “Mars.” “Mercury” will offer a 4.9% yield in Japanese yen—about ten times higher than Japanese bank deposit yields—with 73% of the funds designated for Bitcoin accumulation, including $107 million in direct purchases and $12 million in options trading. This allows the company to bypass equity dilution and switch to low-cost debt leverage, which is highly attractive to domestic investors.

Furthermore, since Japan does not permit market sales mechanisms similar to BitMine’s current ATM model—aimed at preventing listed companies from “instantaneous secondary market dumping”—Metaplanet uses a mechanism called Move-to-Exercise Warrants (MSW), cleverly bypassing this restriction while maintaining flexible fundraising advantages.

MSW is essentially a special type of stock purchase warrant, with the key feature that the exercise price is not fixed but dynamically adjusted periodically. Typically, every few trading days (early series of Metaplanet use every 3 trading days), the exercise price resets to the average of the closing prices of the previous days, such as a 3-day simple moving average. When warrant holders choose to exercise, the company issues new common shares at a price close to the current market value, raising funds.

In the future, this mechanism might be integrated into the perpetual preferred stock product “Mercury,” allowing preferred shareholders to convert into common shares via a similar MSW conversion clause at a dynamic price, making the entire financing process smoother and more controllable.

Meanwhile, MicroStrategy Executive Chairman Michael Saylor has confirmed that the company will not launch similar products in Japan within the next 12 months, providing a valuable first-mover advantage for Metaplanet during this period.

The company successfully issued $150 million of Class B perpetual preferred shares on November 20, marking the beginning of its financing strategy. These actions show that Metaplanet is leveraging Japan’s low-interest-rate environment to build a unique financing “moat” for structural and sustainable expansion.

Domestic Advantages and MSCI Review

In fact, the core value of Metaplanet lies in its unique Alpha derived from Japan’s ecosystem:

On one hand, the continuous depreciation of the yen enhances Bitcoin’s role as an inflation hedge. Metaplanet’s Bitcoin reserves provide Japanese domestic investors an effective way to counteract the purchasing power decline of the yen.

On the other hand, the tax advantages of Japan’s personal savings NISA accounts have attracted 63,000 local shareholders to Metaplanet. Compared with the 55% capital gains tax on directly holding cryptocurrencies, investors can purchase Metaplanet stock via NISA at a lower cost and indirectly gain exposure to BTC.

As a result, Metaplanet has received recognition from international institutions. Capital Group increased its stake to 11.45%, becoming the largest shareholder. The top five shareholders now include MMXX Capital, Vanguard, Evolution Capital, and Invesco. Additionally, Syz Capital partner Richard Byworth publicly withdrew from MicroStrategy and Bitcoin ETFs, redirecting his investments to Metaplanet, believing that the latter has lower financing costs and higher return flexibility.

An industry observer pointed out that companies like Metaplanet must prioritize financial resilience during downturns to sustain long-term accumulation goals.

However, despite the long-term benefits for structural health, there are potential short-term pressures. For example, the recent MSCI index removal review affecting Strategy also impacted Metaplanet. The company was included in the MSCI Japan Index in February this year, but if it is removed due to an excessively high proportion of Bitcoin assets, it may trigger a wave of passive fund sell-offs.

Conclusion

In summary, Metaplanet’s decision to pause Bitcoin purchases is not a failure of strategy or market surrender. Instead, it can be viewed as a tactical move based on risk and efficiency considerations, symbolizing a maturing DAT sector—shifting from aggressive accumulation to risk control.

Bitwise Chief Investment Officer Matt Hougan once stated that evaluating DAT companies based on mNAV is incorrect because this valuation method does not consider the lifecycle of listed companies. Most of the discounting of DAT stocks is due to certain factors, while premiums are often driven by uncertainties. Looking ahead, the valuation gaps among treasury companies will become more pronounced, and Metaplanet may be reconstructing its valuation system.