In the most recent announcement made by the Japanese investment company Metaplanet Inc., it has been disclosed that its Bitcoin holdings have increased significantly, reaching 530.717 BTC as of October 3.
The Tokyo-listed firm indicated that this growth in Bitcoin assets resulted from an intelligent options trading strategy, allowing the company to earn additional BTC and incorporate it into its portfolio.
What Was The Intelligent Options Strategy?
Metaplanet reported that it accrued approximately 23.972 BTC, equivalent to around $1.40 million at prevailing prices, by selling Bitcoin put options and collecting premiums.
The firm disclosed that this was made possible through a BTC options transaction with QCP Capital, whereby it sold 223 Bitcoin put options with a strike price set at $62,000 per Bitcoin. The company further explained:
By selling 223 Bitcoin put options, the Company can enhance its Bitcoin holdings if the market price dips below the strike price of $62,000 per Bitcoin at maturity.
The options are set to mature on December 27, 2024. Importantly, Metaplanet’s strategy of employing put options enables the firm to augment its BTC holdings to improve its financial standing, thus furthering its strategy for long-term asset development. The announcement stated:
This approach not only bolsters the Company’s Bitcoin reserves but also strengthens its balance sheet, aligning with our ongoing financial strategy to enhance long-term Bitcoin exposure and bolster the Company’s financial health, paving the way for profitability.
Moreover, margin collateral played a role in the company’s options trading. As per the announcement, the margin collateral allocated for this options strategy was approximately $13.8 million, derived from new capital raised through stock acquisition rights.
This collateral also ensures that the firm’s existing BTC holdings remain untapped and unhedged for this strategy.
Motivation Behind the Options Trading Strategy
Simon Gerovich, the CEO of Metaplanet, detailed the options strategy in a post on X, mentioning that by selling put options, the firm “benefits” from Bitcoin’s volatility to accumulate premiums. This allows Metaplanet to accrue additional BTC without fully depending on market purchases.
📢ビットコインのプットオプション取引に関するお知らせ… https://t.co/7zvDq70xln
— Simon Gerovich (@gerovich) October 3, 2024
Gerovich specifically noted that this strategy supports the expansion of the firm’s Bitcoin reserves and produces an “additional income stream.”
Additionally, he highlighted that the dual approach of direct holdings alongside yield-generating instruments such as options promotes profit generation, which aligns with the company’s goal of gradually increasing its Bitcoin holdings over time.
The Metaplanet CEO reaffirmed the company’s dedication to maximizing its long-term BTC accumulation. He indicated that Metaplanet recognizes the value of diversifying its Bitcoin gathering strategy through both direct purchases and yield-generating approaches like options trading.
Featured image created with DALL-E, Chart sourced from TradingView
