Metaplanet Inc. has completed a roll-up transaction of its Bitcoin put options in collaboration with QCP Capital, a Singapore-based digital asset trading firm.
The transaction replaces the company’s previous Bitcoin put options, initially disclosed on October 3, 2024, with new options at an updated strike price.
The margin collateral remains unchanged at USD 13.826 million, derived from stock acquisition rights exercise proceeds.
What Does the New Roll-Up Include?
The transaction involves repurchasing 223 put options with a USD 62,000 strike price and simultaneously selling the same number of new put options with a higher strike price of USD 66,000, both set to mature on December 27, 2024. This adjustment allows Metaplanet to increase its nominal yield by 2.65%, bringing the total yield to 13.40%.
The breakeven price for the company now stands at USD 57,156, which is 13.40% below the new strike price.
Metaplanet’s decision to increase the strike price aligns with its strategy of capitalizing on Bitcoin’s volatility while aiming to enhance long-term Bitcoin exposure. This roll-up provides an additional net premium income of 5.9095 BTC, reinforcing the company’s financial position and allowing further growth in its Bitcoin holdings.
Metaplanet now holds 861.387 BTC in total, with an average purchase price of 9,313,428 yen per Bitcoin.
The business’s plan to raise its exposure to Bitcoin is still in line with its long-term financial objectives, which include boosting profitability through strategic Bitcoin acquisitions.
Still, there are risks associated with the acquisition. At maturity, Metaplanet will have to buy Bitcoin at the new strike price of USD 66,000 if the price of the cryptocurrency drops below that level. This will cost them USD 14.718 million for 223 contracts. This sum is USD 892,000 more than the company’s existing margin collateral, thereby increasing financial exposure.
Metaplant Faith in Bitcoin
Despite this, the company remains confident in its strategy and acknowledges Bitcoin’s inherent volatility. The additional premium income of 5.9095 BTC, worth JPY 37,913,100, will be recorded as revenue for the fiscal year ending in December 2024, contributing to a total revenue of JPY 272,464,300 from put option sales this year.
Metaplanet’s continued involvement in Bitcoin-related transactions reflects its commitment to strengthening its digital asset portfolio while navigating the risks associated with the fluctuating market.