Bonds for Bitcoin: Japanese Company Copies MicroStrategy’s Playbook

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As a researcher with a background in economics and a personal experience of witnessing Japan’s economic stagnation during the 1990s, I find Metaplanet’s decision to purchase Bitcoin as a strategic move to reduce its dependence on the Japanese yen intriguing. The company’s recent history, which includes struggling as an operator of low-budget hotels before pivoting to Web3 consulting and adopting Bitcoin as its primary reserve asset, adds to my interest in this story.

Metaplanet, a Japanese public company, has made the announcement that they will be issuing ¥1 billion ($6.2 million) worth of 0.5% bonds for the purpose of acquiring more Bitcoin.

I’m an expert in cryptocurrency investing. In their latest move, the company has followed MicroStrategy’s lead by borrowing $768 million through a convertible note offering to buy Bitcoin. According to U.Today’s report.

Metaplanet, nicknamed Asia’s MicroStrategy, included Bitcoin in their financial holdings back in April.

Prior to transitioning into Web3 consulting, this publicly traded company, previously recognized for managing budget hotels, experienced hardships. However, its fortunes changed significantly when it announced that it had adopted a large cryptocurrency as its main reserve asset.

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This month, Metaplanet revealed the purchase of an additional $1.6 million in Bitcoin, bringing their total to 141.07 bitcoins.

Reducing yen exposure 

To lessen the company’s reliance on the Japanese yen following its recent record-low value versus the U.S. dollar since 1990, Bitcoin was embraced as an alternative.

In March, the Bank of Japan (BOJ) marked an end to 17 years of decreasing interest rates by raising them for the first time. Yet, they made it clear that any future adjustments to their monetary policy would not be drastic.

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As a researcher studying Japan’s economic history, I can share that following the stock market crash in the early 1990s, Japan experienced a prolonged phase of ultra-low interest rates, economic stagnation, and even deflation. Despite being the fourth-largest economy globally with a high standard of living and safety, Japan has lagged behind other G7 nations. Wages and prices have remained relatively stable over the past three decades, and Tokyo, once renowned as one of the most expensive cities in the world, no longer holds that title.

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2024-06-24 09:50