In light of the risks of the current financial landscape in Japan, publicly traded company Metaplanet confirms the adoption of Bitcoin as its main treasury reserve asset.
Metaplanet officially announced that Bitcoin has become its primary store of value asset in April this year.
The company highlighted the launch of a novel investment strategy to convert its cash reserves into cryptocurrency, Following in the footsteps of MicroStrategy, which is currently the public company that owns the largest holdings of Bitcoin.
Back in April, when announcing its Bitcoin investment strategy, Metaplanet highlighted that by adopting the cryptocurrency as its primary reserve asset, it was planning to reduce its exposure to the Japanese yen. Now, recently, the company has ratified this decision, indicating that the challenges of the current financial landscape, economic pressures in Japan and the weakness of the yen, one of the main fiat currencies in the world, have accentuated the need to reduce its exposure to fiat currency and to adopt an alternative reserve asset like Bitcoin, which can preserve its capital while generating long-term growth.
Bitcoin first, only Bitcoin
Metaplanet said Japan's economic outlook has been clouded by the country's public debt-to-gross domestic product (GDP) ratio, which is the highest among developed countries.
According to data published by the company in a release On May 13, Japan's public debt-to-GDP ratio was 261%. This has led the company to implement a new strategy to make its treasury more flexible and diversify towards new assets with real growth potential.
“Metaplanet’s strategy unequivocally prioritizes a “Bitcoin First, Bitcoin Only” approach for the company, with the potential use of long-term yen liabilities and periodic equity issuances as strategic financial options to continually accumulate more bitcoins rather than holding onto the increasingly weak yen,” it said in the statement.
To date, Metaplanet has $7,2 million invested in Bitcoin.
The advantages of Bitcoin as a reserve asset
In the statement released on Monday, the company highlighted several of the advantages that Bitcoin has and that make it a reserve asset. potentially attractive and superior to other existing ones.
First, he highlighted Bitcoin's limited supply of 21 million units worldwide. He also highlighted its decentralized and deflationary nature, pointing out the design of the network protocol, which is designed to make Bitcoin a more scarce and valuable asset over time.
«Bitcoin is an absolutely scarce digital monetary asset, with no central issuer», the company stressed, while also highlighting that the cryptocurrency has a monetary policy that is rigidly written in code until the year 2140. According to Metaplanet, this distinguishes Bitcoin from all existing assets and forms of store of value, both precious metals and other crypto projects that seek to compete with cryptocurrency. “There will only be 21.000.000 bitcoins”he said.
Metaplanet also spoke about Bitcoin mining, an activity that has been condemned by mainstream media outlets, which have wrongly pointed out the network's energy consumption as a harmful expense. «Contrary to common media representations, Bitcoin's proof-of-work (PoW) consensus mechanism is not a liability but a major asset», Metaplanet noted.
In addition to the advantages that investing in Bitcoin brings to the stability and growth of its balance sheet and treasury reserves, the company also noted that its BTC holdings enhance its position as an investment vehicle for those interested in gaining indirect exposure to the market-leading cryptocurrency.
Finally, Metaplanet reaffirmed its commitment to continue investing in Bitcoin using «the full range of capital market instruments» to increase their current holdings.
