Investment company Metaplanet has seen a remarkable rise in the value of its shares, which have surged 158% over the past week and gained the most of any Japanese stock.
The company’s share price now stands at 93 Japanese yen, a staggering 127% increase in just two days. The rapid rise has even forced the Tokyo Stock Exchange to halt trading in circuit breakers on multiple occasions over the past week.
With a market capitalization of nearly $1 billion (14.8 billion Japanese yen), Metaplanet is making significant waves in the financial market.
Metaplanet is following in the footsteps of MicroStrategy
The success can be attributed to the company’s adoption of a strategy similar to that used by MicroStrategy, the largest corporate holder of Bitcoin. Since announcing its Bitcoin investment strategy on April 8, Metaplanet has accumulated 117.7 Bitcoins, currently valued at $7.2 million. As a result, its shares have risen 389%.
In a statement issued May 13, Metaplanet revealed its intention to strategically use a range of capital market instruments to increase its Bitcoin reserves, reflecting MicroStrategy’s approach.
The company pointed to the need to hedge against Japan’s rising debt and the rapid depreciation of the Japanese yen. Japan boasts the worst debt-to-GDP ratio among developed countries, currently at 261%.
In addition, since the beginning of 2021, the Japanese yen has weakened against the US dollar by more than 34%. Metaplanet sees its Bitcoin investment strategy as a direct response to economic pressures.
Although Metaplanet is currently only available for trading on the Tokyo Stock Exchange, which limits access for US investors, plans are underway to tokenize its shares on the Bitcoin network. Arnab Naskar, one of the founders of the security token platform STOKR, has expressed his intention to tokenize Metaplanet’s shares, using a similar approach used to tokenize MicroStrategy’s shares.
Last month, Metaplanet revealed its decision to include Bitcoin in its treasury assets due to several factors. First, it seeks to minimize its exposure to the Japanese yen, which is significantly impacted by Japan’s low interest rate environment.
In an update to shareholders, Metaplanet expressed concern about the yen’s vulnerability and highlighted Bitcoin‘s potential as an inflation hedge, a tool for macroeconomic resilience and a source of long-term capital appreciation.
Corporate Bitcoin holders are beginning to reap the benefits
Many major corporate investors in Bitcoin, including Microstrategy, have already seen their profits soar.
According to data compiled by Saylortracker, at current market prices of around $65,000, MicroStrategy’s position now has a total valuation in excess of $12.57 billion.
This means that the company has huge unrealized gains of almost $6.5 billion on paper, reflecting an increase in profitability of almost 104% over the investment allocation started under Saylor in 2020.
Currently, Bitcoin’s price is around $69,000, down more than 3% from the last day. The leading cryptocurrency is 5% away from its all-time high of $73,750 registered on March 14.
