An Innovative Bitcoin Strategy? |
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Hello everyone!
Tom Carreras reporting for duty on my second issue of The Node.
In case you missed yesterday’s missive, I’m now taking over the newsletter. We’ll provide fresh perspectives (and exclusive content) each day on a piece of news or industry trend. We’d love your feedback, so let us know how we can continue to improve! |
Bitcoin treasury: Phase 2
The godfather of the bitcoin treasury movement, Strategy (MSTR) co-founder Michael Saylor, has managed to vacuum up $65 billion worth of bitcoin over the course of five years by issuing a ton of MSTR shares, convertible notes and a series of preferred stocks.
In fact, Strategy now owns the 11th largest corporate treasury among U.S. companies, just behind Nvidia (NVDA). For reference, the number one in that category is Berkshire Hathaway (BRK), which is currently sitting on $410 billion in cash and cash equivalents.
Until now, Saylor’s copycats (more numerous each day) have simply tried to replicate his strategy. But today the Financial Times reported that Metaplanet, a Japanese firm that has acquired $1.7 billion in bitcoin since it adopted the Saylor playbook, is planning to use its massive bitcoin holdings as collateral for loans to purchase cash-flowing businesses.
This will constitute “phase two” of the company’s bitcoin treasury strategy, said CEO Simon Gerovich, and it seems to be Metaplanet’s own innovation.
As the bitcoin treasury space grows and matures, it’s worth paying attention to possible divergences between Strategy and its imitators. |
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Metaplanet appears to be taking inspiration from the most successful crypto business of all: Tether. The stablecoin firm, which issues one USDT token for every dollar it receives, places the majority of its reserves into short-term treasuries and uses the cash flow to invest in social media platform Rumble (RUM), ASIC manufacturer Bitdeer (BTDR), and a host of other projects.
Metaplanet’s bitcoin holdings don’t produce cash flow, so it needs to take loans out on it, and that informs its future choice of investment. The more interest rates on bitcoin-backed loans drop over time — as the gentlemen over at Ledn say they will — the better it is for Metaplanet.
In any case, Gerovich seemed to say that, for now, the company is solely focused on accumulating bitcoin. Metaplanet is aiming for a stash of 210,000 BTC by the end of 2027: in other words, it wants to multiply its current holdings by more than 13. That might seem like a tall order, but it’s less than half of Strategy’s current 597,235 BTC stash.
Related: Jack Mallers: How We Started Our Bitcoin Treasury Company The founder of Strike sat with CoinDesk TV to talk about Twenty One, a bitcoin treasury firm which enjoys Tether and SoftBank’s backing.
Without Operational Alpha, Bitcoin Treasury Company Premiums Will Collapse
Torbjørn Bull Jenssen, founder and CEO of crypto research and brokerage firm K33, argues that most bitcoin treasury firms don’t have actual business plans. |
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