1 billion yen buys BTC, Japanese stock Metaplanet up nearly 90%! Sora Ventures takes over to create "Asian micro-strategy"

Metaplanet Corporation (3350:JP) announced on 4/8 that its board has approved the purchase of Bitcoin as a significant part of its financial assets, with an investment of up to 1 billion Japanese yen. This strategic shift towards cryptocurrency by Metaplanet is laying the foundation for innovative financial practices in the Japanese capital market. Source

Sora Ventures and Others Invest in Metaplanet, Introducing Bitcoin Strategy

What is Metaplanet? Why Start Buying Bitcoin?

Metaplanet 3350:JP is a conglomerate founded in 1999, originally starting with Hotel Royal Oak and later listed on the Tokyo Stock Exchange (TSE) in 2004. Among its various businesses is also a Web3 consulting business. However, the company has not performed well financially in recent years, with a low stock price, and is seen in the Japanese market as seeking business reconstruction, venturing into the metaverse and Web3.

On 4/8 this year, it was announced that Sora Ventures, 210k Capital, and other entities collectively purchased 46,750,000 shares of Metaplanet, accounting for approximately 41% of the total 114,692,187 shares through EVO FUND and MMXX.

With this investment, Metaplanet has decided to start buying Bitcoin and generate revenue through holding Bitcoin.

Why Choose Bitcoin? Analyzing Metaplanet's Strategic Decision

Metaplanet stated that the decision to include Bitcoin in its financial strategy is based on several key economic indicators and market dynamics:

• Continuous depreciation of the Japanese Yen: The Japanese currency has significantly depreciated over the years, exacerbated by a long period of low-interest rates.
• Rise of cryptocurrencies: Despite initial skepticism, digital currencies like Bitcoin have become a norm in the global financial landscape, with some countries even incorporating them into their national currency systems.
• Historical performance: Over the past decade, Bitcoin has not only proven its resilience but has also continued to appreciate, becoming a reliable long-term investment.

Reasons for Bitcoin Integration

Metaplanet's adoption of Bitcoin has multiple purposes, aiming to use this cryptocurrency as a tool against inflation and a means of macroeconomic stability:

• Hedging against inflation and currency devaluation: In times of significant inflation, Bitcoin's fixed supply contrasts sharply with the potential devaluation of fiat currencies.
• Economic stability: Bitcoin provides stability in the global economy's uncertainty, unaffected by the economic policies of any single country.
• Mainstream acceptance and growth potential: With the approval of a Bitcoin ETF in the U.S., its legitimacy and significant growth potential have been confirmed.
• Technological innovation: This move also demonstrates the company's commitment to effective financial management using the latest financial technology.

Comprehensive Bitcoin Acquisition and Risk Management Policy

To address the complexity of its new digital asset strategy, Metaplanet has established a comprehensive risk management policy, including:

• Roles and responsibilities: Designating specific roles such as the Chief Investment Officer and Chief Executive Officer.
• Market pricing and valuation: Establishing appropriate pricing and valuation methods for financial reporting.
• Security and custody: Handling custody and security measures to protect assets.
• Investment oversight: Defining clear Bitcoin investment management and oversight policies.

Metaplanet's Stock Price Soars Nearly 90% in a Single Day

Metaplanet surged nearly 90% on 4/9, reaching a high point in nearly a year:

Metaplanet plans to regularly assess the value of its Bitcoin holdings and conduct quarterly market value assessments. Any significant financial impacts will be promptly disclosed to ensure transparency and compliance with regulations. This strategic move not only leverages the evolving financial landscape but also positions the company at the forefront of financial innovation in Japan, potentially setting an example for other companies in the region.

Issues with Japanese Companies Holding Virtual Assets?

According to the National Tax Agency of Japan's "Corporate Tax Basic Communication" amendment, in the future, companies may not need to pay taxes on unrealized profits from virtual currencies if certain conditions are met. In the case of Metaplanet, it must meet the condition of having "obtained a technical measure that prevents it from being transferred to others" for at least one year to avoid taxation at the end of the year.

Nevertheless, Metaplanet's strategy with its capital partners has drawn market attention, and whether it can replicate the success of Western companies' micro-strategies in Asia requires further observation.