Why Japan's currency depreciation creates a competitive advantage for Metaplanet

Metaplanet may be benefiting from the structural challenges of the Japanese economy in unexpected ways. As a treasury company in the crypto asset space, a weak currency environment is strengthening the company’s strategic position.

Crisis of the Japanese Yen and the Debt Spiral

Japan’s economic situation is severe. The country’s debt-to-GDP ratio has reached approximately 250%, which is exceptionally high among major advanced economies. To cover the annual credit deficit, the Bank of Japan must continuously print yen, and this currency expansion is steadily eroding the value of the yen.

This currency devaluation process is accelerating. Looking at the rise of Bitcoin (BTC), its severity becomes clear. From 2020 to the present, BTC has increased by about 1,159% in USD terms. However, over the same period, measured in yen, BTC’s increase has reached 1,704%. This difference suggests that the yen is rapidly losing value against both the dollar and Bitcoin.

Hidden Advantages of Metaplanet

The deterioration of this currency environment has unexpectedly brought financial benefits to Metaplanet. According to crypto investor Adam Livingston’s analysis, funds raised by the company in yen are continuously losing real value, which in the long term reduces the company’s debt burden.

Specifically, the preferred bonds issued by Metaplanet have a coupon rate of 4.9%. When viewed in BTC or USD terms, the effective cost continues to decrease. Meanwhile, peer companies (such as Strategy) that raise funds in USD pay a 10% coupon. Paying high interest in a strong currency delays the erosion of value during currency depreciation, but Metaplanet gains a cost advantage by paying low interest in a weak currency.

Track Record as a Treasury Company

Metaplanet is currently ranked 4th among Bitcoin accumulation companies, holding 35,102 BTC. The recent acquisition was executed on Tuesday, purchasing approximately 4,279 BTC for $451 million. Considering the current BTC price of about $91,830, the company’s Bitcoin strategy continues to strengthen.

Resilience Amid Overall Market Slump

The entire crypto treasury sector is facing serious challenges. Major companies like Strategy, BitMine, and Nakamoto have experienced over 90% loss from their peaks, and since the market crash in October, the sector as a whole has continued to lack resilience.

Metaplanet’s stock price has also come under downward pressure, but its yen-denominated debt structure and ongoing BTC accumulation strategy serve as a long-term value preservation mechanism.

Strategic Perspective

The case of Metaplanet demonstrates that even in seemingly negative economic environments, appropriate currency strategies and asset allocation can create competitive advantages. Borrowing in a weak yen reduces the effective cost, and combining this with asset accumulation in strong BTC terms creates a long-term value creation mechanism.