Metaplanet first sold 10,000 bitcoin and later bought back 11,000 at a higher average price, showing that the company can sell part of its holdings when cash needs arise. The transaction was not simply about increasing its bitcoin balance. It also demonstrated to potential creditors that management can convert its reserves into cash when debt-service obligations come due, even if shareholders prefer the company to retain its bitcoin.
The financing strategy came at a significant cost. Metaplanet raised ¥124.7 billion from the bitcoin sale and later spent ¥149.9 billion on the repurchase, putting the average repurchase price about 9.3% higher. At that average price, replacing the 10,000 bitcoin originally sold would have cost roughly ¥11.57 billion more, before transaction costs and any potential tax effects.
The company did not use the sale proceeds to repay loans or bonds. It still held 44,000 bitcoin at the end of September. The transactions were therefore intended to improve the financing conditions supporting its continued accumulation, rather than reduce its liabilities. The disclosures do not show that rating agencies required Metaplanet to sell bitcoin, nor do they confirm that the company has obtained a rating or cheaper financing.
Metaplanet and Strategy Face Different Cash Deadlines
Bitcoin is relatively liquid, but holding cryptocurrency does not mean a company has cash immediately available to pay its bills. Coins may be pledged against borrowings, and management may be unwilling to sell at the prevailing market price. Creditors therefore look beyond the number of bitcoin held to whether a company can raise cash as payment dates approach.
Metaplanet's June financial statements listed ¥67.49 billion in short-term borrowings and ¥8 billion in bonds due within one year. Cash and deposits stood at ¥1.09 billion, alongside ¥250 million in USDC. These figures exclude the company's much larger bitcoin reserve and any financing it may subsequently secure, but they show a gap between disclosed cash balances and short-term financing obligations. Because the figures come from different reporting dates, they should not be treated as a like-for-like measure of current liquidity.
| Financing item | Metaplanet | Strategy |
|---|---|---|
| Disclosed bitcoin holdings | 44,000 bitcoin as of September 30 | 848,000 bitcoin as of October 4 |
| Cash information | ¥1.09 billion in cash and deposits as of June 30, plus ¥250 million in USDC; no comparable September balance was provided | $4.88 billion in a dedicated reserve as of October 4, plus $833.4 million in separate cash holdings |
| Payment arrangement linked to 2027 | ¥8 billion in zero-coupon bonds, redeemable on April 23, 2027, with an early-redemption provision | Holders of $1.01 billion in notes can require a cash repurchase on September 15, 2027 |
| Basis of the figures | The June disclosure listed the full ¥8 billion; the outstanding balance still payable requires further confirmation | Principal is based on the June balance; the amount actually paid will depend on holder elections and financing activity during the period |
Strategy's legal maturity date for the notes is September 2028, but holders can demand an earlier repurchase, potentially bringing the cash obligation forward by a year. The company's June filing also listed roughly $4.9 billion of notes whose holders have a similar repurchase right in 2028. Based on the relevant principal amounts, potential repurchases in 2027 and 2028 total about $5.91 billion.
Holders must exercise the relevant rights, and conversions or repurchases could reduce the amount outstanding before maturity. These figures are therefore not certain final payment amounts. They identify periods when the company may need cash. Bitcoin itself has no maturity date, but companies holding bitcoin still have to meet contractual payment schedules. Refinancing, securities issuance or use of existing cash could provide funding, with each option carrying a cost and depending on market conditions.
Strategy's Dollar Reserves Cover Dividends and Debt Costs
Strategy disclosed on October 5 that it held a dedicated reserve of $4.88 billion as of October 4, along with $833.4 million in dollar-denominated cash, for a combined total of about $5.71 billion. The dedicated reserve is intended to cover preferred-stock dividends and debt interest; other uses require board approval. The separately reported cash is more flexible. Adding the two balances does not mean that the full $5.71 billion is unrestricted cash available for debt repayment.
Between September 28 and October 4, Strategy used $142.5 million from the dedicated reserve for dividends and interest. It also spent $154.1 million repurchasing preferred stock and bought $13 million worth of bitcoin. As of October 4, the company held 848,000 bitcoin at an aggregate purchase cost of about $63.97 billion. Relative to the size of its holdings, the cash buffer gives Strategy more room to meet payments and reduces pressure to sell bitcoin during a short-term market downturn.
Strategy has previously sold bitcoin and shares to repurchase STRC preferred stock and build its cash reserves. Those transactions show that the cash needs supporting the company's securities financing can sometimes take priority over additional bitcoin purchases. Holding dollars can help the company maintain its bitcoin position during a market decline, but the available cushion still depends on future obligations and access to financing.
A Lower Share Premium Raises the Cost of Buying More Bitcoin
Share-based financing faces a similar constraint. When a company's market value is above the value of its underlying assets, issuing shares can raise funds while increasing the bitcoin exposure represented by each share. If that premium disappears, the company must give up more equity to raise the same amount of money, reducing the appeal of the financing for existing shareholders.
Metaplanet's June results showed that its market-to-net-asset-value ratio, or mNAV, was below 1.0 for most of the period. The company's policy generally avoids issuing common shares when the ratio is below that level. This limits one financing channel and resulted in a smaller-than-expected capital raise. Metaplanet continued buying bitcoin through other sources, but shareholder dilution can affect investors' economic interests before the company reaches a point where it must sell assets.
When issuing shares at a low price would disadvantage existing shareholders, selling some bitcoin may be preferable to continuing with a common-stock offering. Preferred stock is another option, but preferred investors rank ahead of common shareholders in their claims on the company's assets and cash flows, depending on the terms of the issue. Unpaid preferred dividends do not automatically constitute a bond default, although they could affect the company's ability to raise funds later.
Metaplanet Seeks Income From Other Companies' Securities
Bitcoin does not generate the yen or dollars needed to pay interest or dividends, so Metaplanet is also exploring income sources beyond holding the asset. Its revised asset-allocation policy targets roughly 85% to 90% of assets in bitcoin, with the remaining 10% to 15% reserved for strategic investments, including income-generating securities.
The company's net-interest-income strategy is designed to earn investment returns above the related financing costs. Potential investments include preferred securities issued by other bitcoin-reserve companies. In practice, one company's bitcoin-reserve financing plan could therefore rely in part on payments from another company facing similar funding demands.
Such investments could generate cash for financing costs or further bitcoin purchases, but they also introduce correlation risk. A fall in bitcoin prices could reduce the value of Metaplanet's core assets, while securities issued by other reserve companies could also decline in value or become less dependable. The actual exposure will depend on the securities Metaplanet buys and how those investments are financed. The company's policy also acknowledges that the assets may be affected by similar market forces at the same time.
The corporate disclosures do not indicate that Metaplanet or Strategy is about to be forced to liquidate bitcoin. A more immediate shift would be for the companies to direct their next tranche of funding toward interest, dividends or repurchases rather than additional purchases of bitcoin. Whether Metaplanet can recover the cost of buying back bitcoin at a higher price through improved credit terms or financing conditions remains to be tested by future disclosures. Strategy's cash reserves provide a buffer for its payment obligations, but the extent of that coverage will depend on the specific maturities and its subsequent financing activity.