Metaplanet bets $25M on Japan’s Bitcoin ecosystem despite heavy BTC losses

Over the next two to three years, Metaplanet intends to fund Bitcoin infrastructure startups with roughly ¥4 billion, or about $25 million, through its new venture and asset management divisions, Metaplanet Ventures and Metaplanet Asset Management. The funding will target several sectors to accelerate growth in Japan’s digital asset ecosystem.

According to official documents, the investment will extend to startup funding, a founder incubator in Japan, and grants for open-source Bitcoin projects and educational efforts. The Tokyo-listed company will use proceeds from its Bitcoin business to fund the initiative. So far, it already owns 35,102 BTC.

Despite the expansion, the move comes at a challenging financial moment for the company. Metaplanet disclosed earlier this year that it posted a full-year loss of about $605 million (¥95 billion).

Metaplanet’s program will focus on Japan ventures first

Metaplanet’s investment strategy will focus on early-stage to scaling companies developing solutions across Bitcoin finance, including lending, custody, payments, and derivatives. The program will center on Japan but will also look globally for innovations that can strengthen the country’s ecosystem.

The firm also plans to dedicate resources to an incubator supporting early-stage Bitcoin and digital asset infrastructure companies in Japan. It will provide funding and operational support, including access to its distribution channels, platforms, and investor network.

The third focus area will be a grants program designed to empower open-source Bitcoin developers, educators, and researchers in Japan while reinforcing the local talent network.

Speaking on the planned investment, Metaplanet CEO Simon Gerovich noted on X: “Japan has built the best regulatory framework in the world for digital assets. Now it needs the companies, the builders, and the infrastructure to match.” 

Metaplanet Ventures has already signed a letter of intent to commit $2.6 million (¥400 million) to JPYC Inc., Japan’s FSA-regulated stablecoin issuer, with the deal set to close in April following due diligence.

Metaplanet saw a full year $605 million, primarily due to a Bitcoin decline

Metaplanet has been focusing on acquiring Bitcoin, especially since October, when the asset dropped from its peak. It’s been particularly consistent in following Saylor’s Strategy’s footsteps, even buying Bitcoin at times when it traded over $100,000.

Over the past few months, most Bitcoin purchases were financed primarily with common stock, though the company also raised funds through preferred shares, specifically MERCURY and MARS.

However, the acquisitions have taken a toll on its finances, with the company reporting a ¥95 billion, roughly about $605 million annual loss, driven mainly by a sharp decline in the value of its Bitcoin reserves in the last quarter. 

Since it began purchasing Bitcoin, the company has deployed nearly $3.8 billion at an average price of $107,000 per coin, putting its holdings about 37% underwater, equal to approximately $1.4 billion in losses.

Nonetheless, most of the firm’s revenue still stems from premiums on writing options on assets, including Bitcoin. Last year, it earned around $51 million from the business, and the company is projecting an impressive 81% rise in full year operating profit. 

In his assessment of Metaplanet, Ahmed also pointed out that the firm’s use of Bitcoin as a key source of both asset and service income creates a concentration risk. Nevertheless, he asserted that the firm’s decision to invest in venture and asset management businesses could provide it with more balanced income sources not directly tied to the token’s prices.

So far, the company’s stock has fallen more than 62% over the past six months, according to Google Finance. It dropped 3.25% on Thursday alone.