As a seasoned crypto investor who has seen the rollercoaster ride of Bitcoin prices for years, I find Metaplanet Inc.’s recent move to be quite intriguing. Their smart options trading strategy, as described, seems like a clever way to hedge against potential market fluctuations while simultaneously growing their Bitcoin reserves.
As per the recent statement by the Japanese investment company, Metaplanet Inc., their Bitcoins have experienced a significant increase. Now, they are holding approximately 530.717 Bitcoins, as of October 3.
According to the Tokyo-based company, they were able to accumulate more Bitcoins through a clever options trading approach. This method enabled them to bring in additional Bitcoins and incorporate them into their investment portfolio.
What Was The Smart Option Strategy?
As reported by Metaplanet, they estimated approximately 23.972 Bitcoins, which is equivalent to nearly $1.40 million at present exchange rates, from the sale of Bitcoin put options and gathering premiums.
The company demonstrated that it could do this by executing a Bitcoin options deal with QCP Capital. Specifically, they sold 223 option contracts for Bitcoins not to be sold until their value reaches $62,000 each. They clarified this move by stating:
Through the purchase of 223 Bitcoin put options, the company stands to expand its Bitcoin holdings should the market value dip below the agreed-upon price of $62,000 per Bitcoin when these contracts expire.
By December 27, 2024, these options will become due. Importantly, Metaplanet’s decision to employ put options enables the company to boost its Bitcoin holdings, thereby strengthening its financial standing and aligning with its long-term goal of asset expansion. As stated in the announcement:
This tactic not only boosts the firm’s Bitcoin holdings but also fortifies its financial status, in accordance with our continuous efforts to bolster long-term Bitcoin investments and enhance the company’s financial stability, ultimately aiding its journey towards becoming profitable.
Additionally, it’s worth noting that the company employed margin collateral when engaging in options trading. The announcement specified that the margin collateral for this particular options strategy amounted to approximately $13.8 million, which was obtained by tapping into fresh capital raised via the issuance of stock acquisition rights.
Furthermore, this security guarantees that the company’s existing Bitcoin reserves won’t be employed or safeguarded for this particular strategy.
Reason Behind The Option Trade Move
In a recent post on X, Simon Gerovich, CEO of Metaplanet, clarified their approach to options trading, stating that they “take advantage” of Bitcoin’s volatile nature to collect premiums by selling put options. This strategy allows Metaplanet to acquire extra Bitcoins without solely depending on market transactions for income.
ビットコインのプットオプション取引に関するお知らせ…
— Simon Gerovich (@gerovich) October 3, 2024
As an analyst, I’d underscore that adopting this method significantly bolsters our Bitcoin holdings and serves as a valuable supplementary revenue source.
Additionally, he emphasized that a two-pronged approach involving both owning Bitcoin directly and investing in Bitcoin-related assets such as options provides an opportunity to earn profits, contributing to the company’s objective of increasing its Bitcoin holdings progressively.
The leader of Metaplanet emphasized once more their dedication to increasing the value of their Bitcoins over the long term. They also shared that they plan to vary their Bitcoin acquisition methods, both by buying directly and employing income-producing tactics such as options trading.
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2024-10-03 21:12