Japanese Firm Turns to Bitcoin as Reserve Asset Amid Yen Devaluation

In response to Japan’s economic challenges, Metaplanet Inc., a publicly listed investment firm based in Tokyo, has announced a significant strategic shift. In a press release on May 13, the company expressed interest in adopting Bitcoin as its primary reserve asset.

Metaplanet’s decision to adopt Bitcoin results from Japan’s sustained economic pressures, including high government debt levels and prolonged negative real interest rates, resulting in a weakened yen. In light of these challenges, Metaplanet views Bitcoin as a non-sovereign store of value that has demonstrated appreciation against fiat currencies.

To achieve its new Bitcoin-based reserve asset, Metaplanet plans to allocate ¥200 million ($1.25 million) towards acquiring Bitcoin. Metaplanet has already started its Bitcoin purchase, announcing it bought 19.8 BTC on May 10.

Bitcoin First, Bitcoin Only

According to a press release by Metaplanet, the company’s treasury strategy now prioritizes a “Bitcoin-first, Bitcoin-only” approach. This entails various financial maneuvers, such as long-dated yen liabilities and periodic share issuances, aimed at accumulating more Bitcoin rather than holding onto the weakening yen. The company emphasized Bitcoin’s unique characteristics as a scarce digital synthetic monetary commodity, noting its lack of a central issuer and rigidly set monetary policy through the year 2140.

Metaplanet plans to leverage the entire spectrum of capital market instruments to grow its Bitcoin reserves, aiming to fortify its position in the digital asset space. As of May 10, the company reportedly owned 117.7 BTC, equivalent to approximately $7.2 million, according to data from Bitcointreasuries.net.

This move to embrace Bitcoin follows in the footsteps of other prominent entities, including MicroStrategy, renowned for its substantial Bitcoin holdings. Firms like Tether and Jack Dorsey’s Blocks have already pledged a certain amount of their monthly earnings to acquire the largest crypto asset.

Bitcoin Fixes This

Bitcoin’s essential qualities have shown it to be a hedge against inflation. Its limited supply, persistent outperformance of traditional asset classes, and widespread adoption have led to its being termed “digital gold.”

El Salvador adopted Bitcoin as a legal tender and a store of value and has seen a positive economic turnover. Microstrategy’s endless Bitcoin purchases have seen it amass more than 1% of the asset’s supply and currently sit on an unrealized profit of over $5 billion.

Metaplanet’s strategic shift towards Bitcoin reflects a broader sentiment among institutional investors seeking alternative assets to hedge against traditional financial risks. As Japan grapples with economic uncertainties, Metaplanet’s adoption of Bitcoin underscores the growing recognition of cryptocurrencies as viable alternatives within mainstream finance.