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Summary From the highest of highs, Metaplanet has fallen to record lows in the space of months. A closer look at the fundamentals, however, points to more than a few silver linings. At current price levels, Metaplanet offers many ways to win. In its current form, Japan-based Metaplanet ( MTPLF ) is the world’s #4 Bitcoin-focused treasury company (by holdings). Metaplanet Metaplanet is primarily listed in Tokyo, but also investable in the US via its over-the-counter MTPLF ticker and a recently launched depositary receipt ( MPJPY ). The company operates via the following units: 1) the main Bitcoin treasury operations, which aims to grow its holdings of bitcoin (the cryptocurrency) over time, 2) ancillary media (Bitcoin Magazine Japan) and hospitality businesses (Bitcoin Hotel). Metaplanet, like its key US peer, Strategy ( MSTR ), became one of the hottest stocks in Japan when its first announced its Bitcoin treasury pivot in April 2024. Metaplanet won both ways – 1) by riding the rise and rise of bitcoin’s price over the period and 2) by seeing its all-important market-to-net asset value (also mNAV), the premium/discount at which Metaplanet stock is priced relative to its underlying bitcoin holdings, rise well above parity. The mNAV metric got so overheated, in fact, that Metaplanet hit highs of >10x in early 2025 and >20x in 2024. Metaplanet In recent months, however, Metaplanet has lost both ways instead – 1) through a steep drawdown in bitcoin prices and 2) through a compressing mNAV, now at lows just above 1x. The losses have been so bad that CEO Simon Gerovich, an ex-Goldman Sachs ( GS ) banker turned hotelier turned bitcoin “hodler”, has been in full damage control mode. On the heels of a tough quarter, which saw the company post record unrealized losses, he noted “this has not been an easy period. Bitcoin is volatile and anyone holding it needs to accept that truth”. Metaplanet So, with the stock down over 80% from prior highs, what now? In this article, I dissect the Metaplanet financing model, as well as the unique advantages it enjoys from being based in Japan. Also, why the current mNAV, despite still being at a slight premium, actually makes for a compelling entry point. Data by YCharts Metaplanet’s Financing Flywheel Can Still Turn Broadly speaking, the “what” of the Metaplanet model is a familiar one. Its manifesto, for instance, highlights financial goals like “grow bitcoin holdings continually and strategically”, “optimize BTC Yield”, and “outperform bitcoin over the long term” – all very much in line with its US counterparts. Where Metaplanet sets itself apart, though, is in “how” it goes about growing its bitcoin stash. a) Rolling Issuance – Only for Bull Markets The standard way treasury companies generate “yield” on their bitcoin holdings is via at-the-market (or ATM) equity facilities, where they gradually sell common stock into the existing market. This isn’t allowed in Japan, so to get around this, Metaplanet mimics a rolling ATM by issuing “moving strike warrants” – the core financing strategy behind its two major accumulation plans, the 21 Million Plan (+210m shares) and the 2025-2027 Plan (+555m shares). For context, these are essentially options with a dynamic strike price based on the previous day’s close. When the equity appreciates, holders, namely the Gerovich-linked EVO Fund, exercise their warrants, convert into equity, and make the difference (today’s higher share price - the lower strike price). Metaplanet, on the other hand, deploys the funds raised into Bitcoin. The net result for shareholders is dilution - but only on the way up. The catch is that this only works under two conditions, both of which only apply in bull markets. Firstly, you need shares to trade higher; otherwise, the warrants stay out-of-the-money, EVO doesn't exercise, and Metaplanet cannot deploy. Secondly, you need an mNAV >1 for the dilution to make sense; an mNAV selling bitcoin to buy stock the more accretive option. Both conditions break in a bear market and as a result, the conveyor belt has slowed to a halt in recent months. Metaplanet Now, if you combine the fact that moving strike warrants only allow Metaplanet to raise money in bull markets and that management doesn’t time its BTC purchases, you get an unfavorable dynamic where the company is set up to buy “high”. Hence, the unfavorable cost basis today. Metaplanet b) Preferreds – A Fundraising Option for Bear Markets The good news is that Metaplanet has other financing tools at its disposal in a bear market. While moving strike warrants were the centerpiece of its “Phase 1” funding strategy, the company has also, more recently, tapped into perpetual preferred stock offerings in “Phase 2” – borrowing from Strategy’s Strife ( STRF )/Stretch ( STRC ) playbook. Metaplanet Specifically, Metaplanet taps into two classes of preferreds – 1) Class A Metaplanet Adjustable Rate Security (or “MARS”) and 2) Class B Metaplanet Convertible for Return + Yield (or “MERCURY”). MARS is non-convertible and comes with an adjustable dividend rate of 1-8%. Meanwhile, MERCURY is convertible (if shares trade 130% above the conversion price of JPY1000/share) and comes with a fixed 4.9% dividend. In the Metaplanet capital structure, MARS sits above MERCURY and common shares. Metaplanet Now, why would investors only demand ~5% for preferreds backed by “risky” bitcoin collateral when comparable instruments like STRF yield ~10%? Well, the cost of capital backdrop is very different in Japan, where you have some of the lowest interest rates in the world (benchmark at 0.75%), keeping bond (2.2% for the ten-year JGB) and savings ( Metaplanet So far things have played out well enough, with take up for MERCURY (see graphic below) fairly robust at 23.6m or JPY21.2bn (via third-party allotment) - even through a bitcoin bear market. That bodes well for MARS, the non-convertible fixed ~5% dividend instrument and, more importantly, the less dilutive issuance for common shareholders. Metaplanet Can senior management, a group of ex-GS bankers, successfully sell the MARS/MERCURY case to investors? I think it’s a “yes” long-term, based on STRC/STRF take up, though drumming up near-term demand amid all the pessimism will be trickier. Either way, Metaplanet’s depressed ~1x mNAV means the market is voting “no”. Therefore, any upside surprise on preferred issuance, key to getting BTC yield going again, could re-rate the stock quite significantly. Metaplanet c) Bitcoin Income – A Path to Unlocking Funding Capacity One of the biggest pushbacks against the treasury company model is that these companies depend on external financing to fund their bitcoin purchases and thus, their “BTC yield” isn’t sustainable to begin with. How then can Metaplanet support consistent yield payouts (preferreds) or repayment obligations (debt) on a non-yield generating asset like bitcoin? The answer is that while bitcoin itself doesn’t produce cash flow, it has unique properties that can be monetized in ways traditional assets cannot. One such property is bitcoin’s volatility, which Metaplanet inherits and sometimes amplifies, making it one of the most volatile names in Japan. Metaplanet Metaplanet can, in turn, monetize this volatility by writing options against itself and collecting a higher than usual premium. Remember that elevated volatility, a key input in options pricing, also increases the probability these options end up "in-the-money” and by extension, underpins a higher premium. Of course this isn’t a risk-free strategy, as the company does have to deliver bitcoin at the agreed strike price. In Metaplanet’s case, this isn’t as much of an issue since it already holds the bitcoin and is quite comfortable acquiring more. Key, though, is the big upfront premium, which keeps the P&L odds tipped heavily in its favor over a long enough timeline. Per its Q4 FY25 report, premium income, housed under the “Bitcoin Income Business” segment, has already ramped up to JPY 4.3bn of quarterly revenue. This run rate is already above the JPY15.6bn income guidance for next year, so as more bitcoin collateral gets freed up for options, there’s a good chance Metaplanet surprises to the upside here. More income also means more capacity to fund preferred dividends, so expect a much bigger appetite for MARS/MERCURY if management executes. Metaplanet Still Riding the Tax Tailwind As I touched on previously, Japan offers a combination of structurally low interest rates and currency weakness you don’t find anywhere else in the world. But there’s another reason a Japanese bitcoin treasury company makes so much sense - taxes. On the one hand, Japan imposes capital gains taxes at a ~20% rate, which applies to equity gains. On the other, you have bitcoin gains, which fall under “miscellaneous income” and thus, can incur taxes of up to 55% (45% plus 10% inhabitant tax) with no tax loss offset. That’s a near thirty-five-point differential at the top end. PWC Moreso if Japanese investors buy stocks through a zero-tax Nippon Individual Savings Account (or NISA), which post-2024 reforms, come with an “unlimited” tax exemption period. Government policy has generally been to incentivize equity investments over low-yielding savings accounts, so this delta, worth up to fifty-five points for a NISA account, is likely here to stay under a Takaichi government as well. NISA In other words, a unique tax arbitrage available to no other bitcoin treasury company. And one that supports a wider mNAV than Metaplanet commands today, in my view. Especially when you also consider the lack of ETF and meaningful treasury company alternatives available in Japan . Bitcointreasuries Wrapping Up Metaplanet has historically traded at much higher mNAVs than any other bitcoin treasury company in the world. That’s no longer true today, despite the fact that the same factors underpinning prior mNAV highs are still very much intact. Those willing to look through the near-term pessimism can therefore win both ways with Metaplanet here – 1) from a bitcoin price rebound and 2) from an expanding mNAV. Key catalysts include progress on ramping up the recurring options income base, take up on the company’s new prefs, as well as prospective index updates after the recent FTSE Japan and All-World mid-cap upgrades. Key risks, on the other hand, include continued bearish sentiment on bitcoin prices, which affects Metaplanet’s ability to fundraise, competition from Japan-based treasury companies, as well as bitcoin-related tax reform.