How MicroStrategy's Bitcoin strategy influenced Japan's Metaplanet

Since MicroStrategy CEO Michael Saylor has gone down the Bitcoin path and made Bitcoin the company's primary reserve asset, he has become one of the leading voices in the Bitcoin community and advocated for Bitcoin's main role for enterprises. I became a supporter. Now, a Japanese company called Metaplanet is taking a similar approach.

To fully understand this approach, I spoke with Bitcoin Strategy Leader Dylan LeClair. Saylor's MicroStrategy has researched that it works, but replicating its success may be difficult. “Metaplanet's decision to adopt the Bitcoin standard was a rational response to the current economic climate both in Japan and around the world,” LeClair told me in an email interview.

Economic challenges drive Bitcoin adoption at MicroStrategy

One of the reasons Saylor advocated when he started working on Bitcoin in 2020 was the economic context and inflationary environment. MicroStrategy started accumulating Bitcoin in August 2020. The company made headlines in December 2020 when it announced its initial purchase of 21,454 BTC, worth approximately $250 million. As reported by CoinDesk, that time.

This first acquisition was precisely positioned as a strategic hedge against inflation, making MicroStrategy one of the first major publicly traded companies to add Bitcoin to its balance sheet. Since then, MicroStrategy, led by CEO Michael Saylor, has been consistently buying Bitcoin. According to Bitcoin Treasury figures, the company holds 252,220 BTC. MetaPlanet is an example of this.

“It is clear that sovereign debt levels relative to GDP have reached unsustainable heights. Without prolonged financial repression, it will be impossible to service this debt in real terms. “The period during which inflation exceeds interest rates is a key strategy for policymakers,” Dylan said. he claimed.

Metaplanet's strategic entry into Bitcoin: Is it too late?

But is it too late to take this approach? The competition is even broader than when MicroStrategy took this path. As of late October 2024, the US-based Bitcoin ETF held over 1 million BTC, a significant accumulation milestone.

Recent estimates put the companies' combined holdings at approximately 1.04 million BTC, representing approximately 5.26% of the total Bitcoin supply. Notably, BlackRock's iShares Bitcoin Trust is the largest single holder among these ETFs, and also out of Grayscale's Bitcoin Trust, ARK, and other newly approved spot ETFs. It has received a large amount of contribution.

“At Metaplanet, we do not believe that it is ‘too late’ to adopt Bitcoin, and we strongly believe that we are in the early stages of institutional adoption and acceptance of Bitcoin. Our timing is strategic. “We believe that by adopting Bitcoin now, we are well positioned for the long term,” LeClair elaborated.

Metaplanet's Bitcoin acquisition strategy: from a Japanese perspective

Inspired by MicroStrategy, MetaPlanet's approach includes a variety of financing mechanisms, including straight bonds, stock acquisition rights exercises, and the issuance of 10 billion yen (approximately $70 million) of stock acquisition rights. “Our focus is on a metric called Bitcoin per share (BTC/share), which is expected to grow by more than 50%,” Leclair explained.

Metaplanet strictly complies with Japanese regulations in its Bitcoin strategy. Regarding the recent issuance of 10 billion yen in stock acquisition rights, LeClair said, “8.5 billion yen of the proceeds will be used to acquire more Bitcoin.''

The Tokyo Stock Exchange has raised several questions that are clearly in the interests of shareholders. This question allowed the company to fully commit to its strategy. “Bitcoin is not only a store of value, it can also serve as collateral, facilitate transactions, and generate income through futures and options markets. To continue increasing both our holdings and our shareholders’ Bitcoin/shares,” LeClair declared.

For safe Bitcoin storage, Metaplanet works with Japanese institutional custodians. “As a public company, custodial management is complex, so transparency is extremely important,” Leclair said, referring to the partnership with Joseki to provide proof of reserves for its holdings.

MetaPlanet's Vision: Driving Enterprise Bitcoin Adoption

This Japanese company aims to set an example by advocating for Bitcoin as a corporate reserve asset in Japan and the world. “We expect more companies to adopt Bitcoin as a reserve asset, although the scale and scope of adoption will vary,” Leclair said.

MicroStrategy's successful Bitcoin adoption has propelled its stock price to new heights, making it one of the best-performing stocks in 2024. As of October, MSTR had soared approximately 552% year-to-date, reaching an all-time high of $212, significantly outperforming the stock. S&P 500 and other major tech stocks.

Metaplanet currently holds 1018.17, which is five times its market capitalization before adopting this strategic shift.