• Metaplanet expands Bitcoin treasury with $230 million cumulative loans.

• The company employs debt and preferred equity to fund BTC accumulation without diluting shares.

• Despite a 20% unrealized loss, Metaplanet maintains confidence in its collateral due to substantial BTC reserves.

Discover how Metaplanet leverages $130 million Bitcoin-backed loans for strategic growth amid market volatility—explore the risks and opportunities in corporate BTC adoption today.

What is Metaplanet’s Latest Bitcoin-Backed Loan Strategy?

Metaplanet’s Bitcoin-backed loan strategy involves drawing on a $500 million credit facility secured by its Bitcoin holdings to gain liquidity for further BTC purchases and operational expansions. On Friday, the Tokyo-listed firm executed a $130 million draw, bringing its total borrowings to $230 million. This approach allows Metaplanet to scale its treasury without issuing new equity, though it carries risks like potential collateral calls if BTC prices drop significantly.

How Does Metaplanet Balance Debt and Equity in Bitcoin Accumulation?

Metaplanet utilizes a dual financing model combining short-term debt via its Bitcoin-collateralized credit line and long-term capital through preferred shares. The credit facility provides flexible access to funds, enabling quick responses to market opportunities, such as buying BTC during dips. Meanwhile, the planned $135 million issuance of Class B perpetual preferred shares offers stable funding with fixed dividends and conversion options, appealing to investors interested in Bitcoin exposure.

According to Metaplanet’s disclosure, this structure supports income-generation programs and potential share buybacks. Data from BitcoinTreasuries.NET indicates the company’s average BTC purchase price stands at $108,036, with current prices around $87,000, resulting in nearly 20% unrealized losses. Despite this, executives emphasize the robustness of their reserves, stating that the scale of holdings provides ample buffer against volatility. Bitcoin strategy director Dylan LeClair reinforced this commitment by affirming the firm’s HODLing approach on social media.

The strategy also mitigates dilution risks for common shareholders. Preferred shares include repurchase rights under specific conditions, ensuring long-term alignment with Bitcoin’s growth potential. Experts note that such corporate treasury models, pioneered by firms like Metaplanet, could influence broader adoption in Asia, where regulatory scrutiny on Bitcoin-holding companies is increasing following recent market events.

The fresh debt draw shows how Metaplanet is using both debt and preferred equity to accelerate Bitcoin purchases and income-generation strategies.

Tokyo-listed Bitcoin treasury company Metaplanet has drawn another $130 million in Bitcoin-backed credit, expanding its use of collateralized borrowing to accelerate BTC purchases, income-generation strategies and potential share buybacks.

On Tuesday, Metaplanet disclosed it executed the loan on Friday under a previously announced credit facility. The borrowing forms part of the company’s $500 million credit line, which allows it to raise short-term liquidity using its Bitcoin (BTC) as collateral.

With the fresh capital, the company has now drawn $230 million in cumulative loans from the facility, up from the $100 million disclosed for an earlier Oct. 31 credit pull.

The company recognized that borrowing against its BTC exposes it to collateral calls if the BTC price declines. However, it expressed confidence in its reserve size, saying that it’s large enough to withstand volatility.

“Given the substantial scale of Bitcoin holdings relative to the loan amount, the Company expects to maintain sufficient collateral headroom,” Metaplanet wrote.

Metaplanet disclosure of $130 million loan. Source: Metaplanet

Metaplanet employs two financing tracks to scale its Bitcoin strategy

Metaplanet’s latest loan highlights its two-track funding strategy built around debt and equity instruments to fuel the continuous accumulation of Bitcoin.

On the one hand, the company’s $500 million Bitcoin-backed credit facility enables Metaplanet to have flexible, on-demand liquidity secured by its BTC reserves. This allows the company to expand its Bitcoin income program, buy more Bitcoin and support share buybacks without issuing new stock.

Alongside the credit line is another plan to raise $135 million through the issuance of new Class B perpetual preferred shares.

Unlike the short-term, easily repayable structure of the credit facility, the preferred shares represent long-term funding. Investors who buy the shares get a fixed yearly payout, can convert them into regular stock and in some cases, the company can buy them back if certain conditions are met.

The two channels indicate that Metaplanet is employing both collateralized borrowing and specialized equity issuance to scale its Bitcoin treasury strategy even during periods when its holdings sit at an unrealized loss.

Related: Tokyo exchange operator eyes crackdown on Bitcoin-holding firms after DAT rout

Metaplanet to keep holding despite unrealized losses

BitcoinTreasuries.NET data shows that Metaplanet is sitting on a nearly 20% unrealized loss on its Bitcoin investments. The company purchased its BTC at an average cost of $108,036, while the current BTC price hovers around $87,000.

Despite this, the company continues to hold onto its BTC and accumulate more. Bitcoin strategy director Dylan LeClair said on X that the company is “HODLing.”

Source: Dylan LeClair

Community member Ragnar linked the loan’s execution date to Bitcoin dropping to $82,000 on Friday. “It’s very likely that they bought the Bitcoin dip. I like the stock,” Ragnar wrote.

Magazine: Taiwan considers Bitcoin reserve, Sony’s Ethereum L2 super app: Asia Express

Frequently Asked Questions

What Risks Does Metaplanet’s Bitcoin-Backed Loan Carry for Investors?

Metaplanet’s loans are secured by Bitcoin collateral, exposing the firm to margin calls if BTC prices fall sharply below the loan-to-value ratio. However, with holdings significantly exceeding the $230 million borrowed, the company maintains a strong buffer. Investors should monitor BTC volatility and Metaplanet’s reserve management to assess ongoing stability.

How Is Metaplanet Using Its $500 Million Credit Facility for Bitcoin Growth?

Metaplanet taps into its Bitcoin-backed credit facility for quick liquidity to buy more BTC during market dips, expand income programs, and fund share buybacks. This on-demand access supports steady treasury growth without equity dilution, allowing the company to capitalize on Bitcoin’s long-term potential while navigating short-term price fluctuations.

Key Takeaways

• Strategic Debt Utilization: Metaplanet’s $130 million draw from its $500 million facility demonstrates effective use of collateralized borrowing to fuel Bitcoin accumulation.
• Dual Funding Approach: Combining short-term loans with $135 million in preferred shares provides balanced financing for treasury expansion and income generation.
• Resilience Amid Losses: Despite 20% unrealized losses, robust BTC reserves ensure collateral headroom—consider monitoring for buyback opportunities.

Conclusion

Metaplanet’s Bitcoin-backed loan strategy and preferred equity issuance underscore a sophisticated approach to corporate Bitcoin adoption, blending debt flexibility with long-term capital. By drawing $230 million cumulatively while holding firm through unrealized losses, the firm positions itself for sustained growth in volatile markets. As Bitcoin treasury models evolve, investors may find opportunities in similar strategies—stay informed on regulatory developments in Asia to gauge future impacts.