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in advertisement Japanese company Metaplanet today revealed plans to increase its Bitcoin (BTC) holdings by issuing $11.3 million in bonds to fund the purchase.
Metaplanet is increasing BTC holdings by issuing bonds
The Tokyo Stock Exchange-listed company announced on November 18 that its board of directors had approved the sale of secured debt worth 1.75 billion yen, or approximately $11.5 million. The bonds will have a maturity period of one year, mature on November 17, 2025, and carry an interest rate of 0.36% per annum.
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Only proceeds from the bond issue will be used to purchase BTC. It should be noted that Metaplanet already holds 1,018 BTC on its balance sheet.
Often referred to as “Asia’s MicroStrategy,” Metaplanet’s latest BTC acquisition announcement comes just one week after US-based business intelligence firm MicroStrategy. Purchased 27,200 Bitcoin, worth about $2.03 billion at current market prices.
Metaplanet began acquiring BTC as a strategic treasury reserve asset in April. The company announced that it is adopting a “Bitcoin first, Bitcoin only” approach, reflecting MicroStrategy’s Bitcoin investment strategy.
Since April, the early-stage investment firm has been steadily expanding its Bitcoin portfolio. For exampleThe company acquired an additional 20,195 BTC in Junevalued at approximately $1.2 million.
It added another 38,464 bitcoins in September, worth about $2 million. Recently, in October, the company Announce She purchased 156.78 BTC, bringing her total holding to over 1,000 BTC.
Despite the announcement of the bond issue, Metaplanet’s share price saw little movement. The company’s stock closed the day with a modest 0.81% increase on Monday.
However, since the company began its Bitcoin acquisition strategy, its shares have seen tremendous growth. On April 4, 2024, Metaplanet shares were trading at 190 yen ($1.23). Today, it is trading at 1,994 yen (US$12.86), reflecting gains of about 950% in just over seven months.
Scarcity of supply of Bitcoin will cause the price to increase?
With increased retail, institutional and even sovereign demand, the limited supply of Bitcoin could lead to a supply shock, which could push the price of the digital asset to unprecedented levels. As a reminder, the total supply of BTC is 21 million by design.
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According to a hadith analysis According to a CryptoQuant analyst, BTC reserves on cryptocurrency trading platforms have fallen to their lowest level in five years. The analyst also noted that more investors are holding Bitcoin long-term as a hedge against rising inflation and a falling currency.
Likewise, recently a report It indicates that demand for BTC significantly exceeds supply. This growing imbalance between supply and demand could pave the way for the next major Bitcoin price breakout. Bitcoin is trading at $90,909 at press time, up 0.1% in the past 24 hours.
Featured image from Unsplash, graphics from Yahoo! Finance and Tradingview.com