Metaplanet has edge over US-based DATs due to JPY weakness: Analyst
Metaplanet, a Bitcoin (BTC) treasury company, may have a financial edge over other digital asset treasury companies due to structural weakness in the Japanese yen (JPY), according to BTC analyst and crypto treasury company investor Adam Livingston.
Japan's debt-to-gross domestic-product ratio is about 250%, Livingston said. This high level of debt continues to weaken the yen, which must be printed each year to increase the deficit, contributing to high levels of debt and the erosion of the yen's value.
Measured against the US dollar, BTC has appreciated by 1,159% since 2020, but measured against the Japanese yen, BTC has gained 1,704% over the same period.
A weaker yen means Metaplanet's liabilities are denominated in fiat currency, which is weaker than the dollar, giving the company cheaper financing per unit of fiat currency, Livingston said. He added:
“Each coupon Metaplanet pays is in a currency that has been depreciating relative to BTC and USD, so the actual, BTC-paid, value of that 4.9% coupon will decrease. The strategy pays the 10% coupon in dollars, a strong unit, so the liability will gradually erode.”
The analysis comes amid widespread declines in crypto-treasury companies, some of which have lost more than 90% of their value from their peaks, as crypto markets struggle to regain momentum and establish new all-time highs after a historic fall in October.
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Metaplanet will be the 4th largest BTC treasury company despite the massive drop in DAT.
Metaplanet holds 35,102 BTC in reserves at the time of this writing. This makes Metaplanet the 4th largest Bitcoin treasury by BTC holdings.
The company's latest BTC purchase was on Tuesday when it bought 4,279 BTC for $451 million.
However, despite accumulating a large amount of BTC, the company's share price has fallen behind the rest of the crypto treasury sector, including Strategy – the largest BTC treasury, BitMine, Nakamoto and others.
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