Metaplanet, a Tokyo-based company, has announced the purchase of more than 20.2 Bitcoin (BTC) as part of a $6 million strategy aimed at increasing its BTC treasury.
TakeAway Points:
- Metaplanet’s $6 million strategy included a $1.2 million buy, bringing its total bitcoin holdings to 161.3 BTC.
- Mirroring MicroStrategy’s long-term accumulation strategy, the Tokyo-based investment firm wants to increase its Bitcoin treasury.
- Investor confidence in Metaplanet’s strategy, which is centred around bitcoin, was evident in the 1% increase in shares prior to the announcement.
Metaplanet Strategical accumulates Bitcoin
Metaplanet, a publicly listed Japanese investment adviser, has made a significant move to bolster its Bitcoin holdings.
This recent acquisition, valued at 200 million yen ($1.2 million), brings Metaplanet’s total Bitcoin holdings to 161.3 BTC. The company had previously disclosed plans to invest an additional $6 million in Bitcoin, adding to its existing $9 million worth of the cryptocurrency. This strategic focus on Bitcoin is driven by changes in the investment environment resulting from the Covid pandemic, as stated on Metaplanet’s website.
The move mirrors the approach taken by MicroStrategy, a Tysons Corner, Virginia-based software developer, which has been accumulating Bitcoin for nearly four years and now holds over 226,000 BTC, representing more than 1% of the total Bitcoin supply. Metaplanet’s shares saw a 1% increase before the announcement, indicating positive market reception for its Bitcoin accumulation strategy.
Bitcoin’s latest Market Performance
As the second quarter comes to a close, Bitcoin investors are reflecting on the cryptocurrency’s recent performance and pondering its future trajectory. Bitcoin has experienced a 13% decline since March, a stark contrast to the 67% and 57% surges seen in the previous two quarters.
After reaching an all-time high of $73,798 on March 14, Bitcoin is now trading around $61,000. This downturn has raised concerns about the sustainability of momentum trades in Bitcoin, especially in the context of a broader financial market environment characterized by higher-for-longer interest rates.
Austin Reid, global head of revenue and business at FalconX, noted, “A lot of people in the market have questions that are mostly anchored on concerns from a macro perspective. So I think there’s just some short-term uncertainty being reflected within the crypto market, as we’re seeing in some other asset classes too.”
ETF Mania and Market Sentiment
The initial euphoria surrounding the approval of Bitcoin ETFs by the Securities and Exchange Commission (SEC) in January has waned, as evidenced by a significant slowdown in demand for these funds. According to CoinShares, investors poured approximately $2.6 billion into Bitcoin funds in the second quarter, compared to around $13 billion in the first quarter. Matthew O’Neill, co-director of research at Financial Technology Partners, explained, “There was a lot of euphoria around the release of the ETFs, and then there was a natural price correction after the rally.”
Despite the recent downturn, Bitcoin remains in a bull market, with market participants expecting the cryptocurrency to retest its March all-time high of about $73,000 by the end of the year. Factors such as a potential Federal Reserve rate cut in September and U.S. presidential election campaign messaging about the U.S. dollar could catalyze the next leg higher for Bitcoin.
Zach Pandl, managing director of research at Grayscale Investments, highlighted the impact of supply dynamics, stating, “The Bitcoin halving was a known positive supply event for the market for this year—we have less bitcoin being produced.”
