Metaplanet stock price rises 9% post-rollup Bitcoin put options at $66,000, boosting yields and revenue amid investor confidence in its BTC strategy grows.
Metaplanet Inc.’s stock saw a surge of nearly 9% as investors appeared to applaud the company’s latest move in the Bitcoin market.
The Japanese publicly traded firm reported an increase in revenue from its Bitcoin put options strategy, which aims to enhance its long-term Bitcoin holdings.
By adjusting its Bitcoin put options to a higher strike price, the company positioned itself to capitalize on future price movements while improving its financial outlook.
Metaplanet Stock Rises as Bitcoin Strategy Increases Yield
The rise in Metaplanet’s stock price followed the company’s announcement to adjust its Bitcoin put options. Investors seemed to welcome this development.
Specifically, the company replaced its previous put options with a strike price of $62,000 per Bitcoin, increasing it to $66,000 with a maturity date set for December 2024.
This transaction, executed in partnership with QCP Capital, allowed the Japan-based firm to secure an additional net premium of 5.9095 BTC, valued at approximately 57.9 million yen.
The company also noted that this strategy increased the nominal yield on the options by 2.65%, raising the total nominal yield to 13.4%.
CEO Simon Gerovich explained that this adjustment aligns with the firm’s strategy to take advantage of Bitcoin’s volatility while increasing its long-term Bitcoin exposure.
The total premium earned from these transactions amounts to 272.5 million yen, which will be recorded as revenue for the fiscal year ending in December 2024.
Moreover, the move underscores Metaplanet’s commitment to increasing its Bitcoin holdings, which now total 861.387 BTC, with an average purchase price of 9,313,428 yen per Bitcoin.
By implementing this strategy, the company aims to not only boost revenue but also benefit from potential future increases in Bitcoin’s price.
Bitcoin Price Volatility Poses Risk
Bitcoin has experienced significant price volatility recently, influenced by various macroeconomic factors and market trends.
This volatility has also impacted top altcoins, contributing to an unpredictable trading environment.
While Metaplanet’s new put options strategy has delivered strong gains, it carries certain risks.
For instance, if Bitcoin’s price drops below the new strike price of $66,000 by the December 2024 maturity date, the company would need to purchase Bitcoin at that price.
This could expose the firm to approximately $892,000 in financial risk beyond its current margin collateral.
Despite these potential risks, Metaplanet remains confident in its strategy, which focuses on gradually increasing its Bitcoin holdings and driving long-term profitability.
Growing Institutional Interest in Bitcoin
Metaplanet’s strategic move coincides with increasing institutional interest in Bitcoin.
For example, MicroStrategy recently announced plans to become the largest Bitcoin bank, sparking optimism in the market and boosting its stock price.
Similar to MicroStrategy, Metaplanet is expanding its Bitcoin holdings, signaling growing confidence in the cryptocurrency.
At the time of writing, Bitcoin’s price had surged by more than 3%, trading at $67,719, with trading volume up by 32% to $50.89 billion.
In the last 24 hours, Bitcoin reached a high of $67,881.68, reflecting the ongoing volatility in the market.
Despite these fluctuations, a recent price prediction has further fueled investor optimism.
The latest forecast suggests that Bitcoin could reach $95,685 in November and $91,705 in December, providing hope for continued gains in the near future.