Metaplanet Doubles Bitcoin-Backed Borrowing With Fresh $130M Loan

Tokyo-listed Bitcoin treasury company Metaplanet has drawn another $130 million in Bitcoin-backed credit, expanding its use of collateralized borrowing to accelerate BTC purchases, income-generation strategies and potential share buybacks.

On Tuesday, Metaplanet disclosed it executed the loan on Friday under a previously announced credit facility. The borrowing forms part of the company’s $500 million credit line, which allows it to raise short-term liquidity using its Bitcoin (BTC) as collateral.

With the fresh capital, the company has now drawn $230 million in cumulative loans from the facility, up from the $100 million disclosed for an earlier Oct. 31 credit pull.

The company recognized that borrowing against its BTC exposes it to collateral calls if the BTC price declines. However, it expressed confidence in its reserve size, saying that it’s large enough to withstand volatility.

“Given the substantial scale of Bitcoin holdings relative to the loan amount, the Company expects to maintain sufficient collateral headroom,” Metaplanet wrote.

Metaplanet disclosure of $130 million loan. Source: Metaplanet

Metaplanet employs two financing tracks to scale its Bitcoin strategy

Metaplanet’s latest loan highlights its two-track funding strategy built around debt and equity instruments to fuel the continuous accumulation of Bitcoin.

On the one hand, the company’s $500 million Bitcoin-backed credit facility enables Metaplanet to have flexible, on-demand liquidity secured by its BTC reserves. This allows the company to expand its Bitcoin income program, buy more Bitcoin and support share buybacks without issuing new stock.

Alongside the credit line is another plan to raise $135 million through the issuance of new Class B perpetual preferred shares.

Unlike the short-term, easily repayable structure of the credit facility, the preferred shares represent long-term funding. Investors who buy the shares get a fixed yearly payout, can convert them into regular stock and in some cases, the company can buy them back if certain conditions are met.

The two channels indicate that Metaplanet is employing both collateralized borrowing and specialized equity issuance to scale its Bitcoin treasury strategy even during periods when its holdings sit at an unrealized loss.

Metaplanet to keep holding despite unrealized losses

BitcoinTreasuries.NET data shows that Metaplanet is sitting on a nearly 20% unrealized loss on its Bitcoin investments. The company purchased its BTC at an average cost of $108,036, while the current BTC price hovers around $87,000.

Despite this, the company continues to hold onto its BTC and accumulate more. Bitcoin strategy director Dylan LeClair said on X that the company is “HODLing.”

Community member Ragnar linked the loan’s execution date to Bitcoin dropping to $82,000 on Friday. “It’s very likely that they bought the Bitcoin dip. I like the stock,” Ragnar wrote.