Metaplanet sells put options to grow Bitcoin stash by nearly 24 BTC Metaplanet sells put options to grow Bitcoin stash by nearly 24 BTC
The Bitcoin-only firm explained that it wants to tap into BTC's volatility for profit.
2 min read
Updated: Oct. 3, 2024 at 10:58 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin investment firm Metaplanet said it sold 233 BTC put options and earned a premium of 23.97 BTC, according to an Oct. 3 statement.
The firm stated it sold 223 contracts for $62,000 BTC put options, set to expire on Dec. 27, 2024. These contracts were fully backed by $13.8 million generated from Metaplanet’s 11th stock acquisition rights exercise.
A put option is a type of financial contract that gives the buyer the right, but not the obligation, to sell a specific stock or asset at a set price (called the strike price) within a specific time period.
Each contract earned Metaplanet 0.1075 BTC in premiums, accumulating to a total of 23.97 BTC. This income brought the firm’s total Bitcoin holdings to 530.72 BTC, acquired at a cost of ¥4.965 billion (around $33.8 million).
Metaplanet revealed it had entered into this agreement with QCP Capital, a Singapore-based digital asset trading firm.
Why Metaplanet is pursuing this strategy
Metaplanet explained that its goal was to leverage Bitcoin’s volatility to generate income while keeping its cash-secured position. It stated:
“This strategy not only enhances the Company’s Bitcoin reserves but also reinforces its balance sheet, aligning with our ongoing financial strategy to strengthen long-term Bitcoin exposure and improve the Company’s financial position, supporting its path toward profitability.”
Metaplanet CEO Simon Gerovich highlighted the strategy’s alignment with the company’s broader goals. He emphasized that this approach allows them to grow their Bitcoin holdings without solely relying on direct purchases.
Gerovich explained that while most of their assets remain in Bitcoin, using some for options strategies helps generate additional income. This dual approach allows them to increase holdings while benefiting from a steady income stream.
The strategy also supports Metaplanet’s aim to generate annual profits and increase shareholder value, all while maintaining its focus on Bitcoin.
He concluded:
“Metaplanet remains committed to being a Bitcoin-only company, focused on maximizing our long-term exposure to this transformative asset. By utilizing both direct holding and yield-generating strategies, we position ourselves to capitalize on Bitcoin’s growth potential while maintaining a stable and profitable foundation.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Metaplanet
Metaplanet Inc., a publicly traded company listed on the Tokyo Stock Exchange (3350), is a Japanese company that has undergone a strategic transformation to focus on Bitcoin.