On Tuesday, Metaplanet announced a $500 million Bitcoin-backed credit facility to support long-term BTC holdings and improve capital efficiency. The company is also continuing its 75 billion yen ($500 million) share buyback program.
The announcement reflects its growing role as a publicly traded Bitcoin treasury company in Japan. However, some industry observers have expressed concerns about potential risks related to collateral and market volatility.
Bitcoin-Backed Credit Facility Improves Capital Strategy
Metaplanet, listed on the Tokyo Stock Exchange (3350.T), had established a large credit line to borrow funds using its Bitcoin holdings as collateral. According to the board resolution, the facility will provide liquidity for future BTC acquisitions while supporting the company’s broader capital allocation strategy.
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The initiative reflects a shift toward using Bitcoin as a strategic balance sheet asset rather than a speculative security. By using BTC as collateral, Metaplanet aims to increase asset yield while reducing stock dilution. Company representative Simon Gerovich highlighted that the facility allows for “flexible execution within the company’s capital allocation strategy.”
Stock performance and market reaction
Following this announcement, Metaplanet stock closed at 499 JPY on October 28, up 2.25% from the previous session. The market response indicates investor interest in the company’s dual approach of BTC-backed financing and share buyback.
Despite the rise, some investors remain cautious due to Bitcoin’s high valuation multiples and potential price volatility. If the value of BTC declines, the effectiveness of the collateral could be reduced, which could affect loan terms and liquidity needs.
Critical Perspectives and Risk Considerations
Some market commentators have expressed concerns about Metaplanet’s strategy.
A cryptocurrency analyst said selling BTC to fund stock buybacks would be “a pure death spiral,” but using BTC as collateral for buybacks is “an interesting move” that limits downside risk.
They further noted that the main risks relate to collateral ratios and interest rates during a downtrend in BTC. Furthermore, they emphasized that maintaining stock price premiums depends on the company’s ability to manage liquidity and investor demand, suggesting that careful monitoring is necessary to avoid unintended financial stress.
