Metaplanet Inc. stock price noted a surge of nearly 9% as the investors appear to have lauded the company’s recent move in the Bitcoin market. Notably, the Japanese publicly listed firm reported increased revenue from its Bitcoin put options strategy, which aims to boost long-term holdings. By rolling up its Bitcoin put options to a higher strike price, the firm has positioned itself to benefit from future price movements while strengthening its financial outlook.
Metaplanet Stock Soars As Bitcoin Strategy Boosts Yield
The recent surge in Metaplanet stock price came after its announced to roll up its Bitcoin put options. The investors appear to have celebrated the development. Notably, the firm has replaced its prior put options with a strike price of $62,000 per BTC, rolling them up to $66,000 with a December 2024 maturity date.
This transaction carried out in collaboration with QCP Capital, allowed the Japan-based firm to generate an additional net premium of 5.9095 BTC, valued at around JPY 57.9 million. Notably, the firm said that the new strategy also increases its nominal yield on these options by 2.65%, bringing the total nominal yield to 13.4%.
Meanwhile, CEO Simon Gerovich said that this adjustment aligns with the firm’s ongoing strategy to capitalize on Bitcoin’s volatility while increasing the firm’s long-term BTC exposure. The total premium generated from these transactions amounts to JPY 272.5 million, which will be recorded as revenue for the fiscal year ending December 2024.
In addition, this move underscores the company’s commitment to increasing its BTC holdings, which now stand at 861.387 BTC, with an average purchase price of 9,313,428 yen per Bitcoin. By adopting this strategy, the firm is not only enhancing its revenue but also positioning itself to further benefit from future BTC price increases.
Bitcoin Price Volatility Imposes Risk
Bitcoin price has faced highly volatile trading lately amid several macroeconomic developments and other market trends. It’s worth noting that the volatility in the flagship crypto has also caused a topsy-turvy trading scenario in the top altcoins.
Having said that, the new put options strategy has delivered impressive gains to Metaplanet. However, it also carries some risks. For instance, if the Bitcoin price falls below the new strike price of $66,000 by the December 2024 maturity, the firm will be required to purchase Bitcoin at this price. This could result in a financial exposure of around $892,000 beyond its current margin collateral.
However, despite this potential risk, the company appears to remain confident in its approach. The firm’s strategy is focused on gradually increasing its Bitcoin holdings and driving long-term profitability.
This also comes as the institutional interest soared on BTC. For instance, MicroStrategy has recently revealed its plan to become the largest Bitcoin bank, which has sparked optimism in the market, sending MSTR stock price higher. Besides, Asia’s MicroStrategy, Metaplanet is also boosting its BTC holdings, indicating a growing confidence in the crypto.
During writing, BTC price soared over 3% and exchanged hands at $67,719, while its trading volume rose 32% to $50.89 billion. The crypto has touched a high of $67,881.68 and a low of $67,881.68 in the last 24 hours, reflecting the volatile scenario in the market.
However, a recent price prediction has sparked optimism among investors, despite the volatile market condition. The latest Bitcoin price prediction indicates BTC to hit $95,685 in November, and $91,705 in December.
Rupam Roy
Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
