Metaplanet Adopts Bitcoin as a Store of Value in the Face of Rising Japanese Debt

In a strategic move, Tokyo-based company Metaplanet chose to integrate bitcoin (BTC) into its portfolio as a reserve asset, in response to Japan’s growing national debt and the subsequent instability of the yen. The company announced last Monday that this initiative aims to mitigate the economic risks worsened by the country’s fiscal situation. “Metaplanet has adopted bitcoin as its strategic reserve asset. The move is a direct response to sustained economic pressures in Japan, notably high levels of government debt, prolonged periods of negative real interest rates and the consequent weak yen,” the company said.

Since April this year, Metaplanet has acquired a total of 117.7 BTC, equivalent to approximately $7.19 million, following a similar strategy to that of MicroStrategy, a US company that has also made significant investments in bitcoin. Currently, Metaplanet has focused its efforts on bitcoin and investments in commercial real estate, distancing itself from any initiatives related to Web3.

Japan’s economic context is particularly worrying, with the gross debt to GDP ratio exceeding 254%, the highest among developed nations, according to data from the International Monetary Fund. This delicate fiscal situation has prevented the Bank of Japan (BOJ) from raising interest rates in line with the US Federal Reserve and other central banks, as higher rates could further increase the cost of public debt.

*Strategic Treasury Transformation and Bitcoin Adoption by Metaplanet* pic.twitter.com/Uz5RxkBV2D

— Metaplanet Inc. (@Metaplanet_JP) May 13, 2024

The yen, one of the main global reserve currencies, has suffered a significant devaluation, falling 50% against the US dollar since the beginning of 2021. Recently, the Japanese currency reached its lowest price in 34 years, trading at more than 155 yen per US dollar. The devaluation led the BOJ to intervene in the foreign exchange market, selling dollars to try to stabilize the currency.

Metaplanet plans to hold bitcoin as part of its long-term reserve, seeking minimally realized tax gains and potentially increasing its bitcoin position by issuing yen-denominated long-term liabilities.

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