Metaplanet Secures $100M Bitcoin Loan as Lummis Backs BTC Reform

Metaplanet stock stayed under pressure this week. Bitcoin briefly dropped below the key $100,000 support level as the crypto crash deepened. It also fell as the company raised $100 million for further accumulation and share repurchases.

Metaplanet Raises $100 Million in Bitcoin-backed funding

Metaplanet, the fourth-biggest Bitcoin treasury company, has raised $100 million in debt. It aims to accumulate more Bitcoins and repurchase its crashing Metaplanet stock.

The new fundraising came a few days after the management. Also, its directors agreed to establish a $500 million fund backed by its Bitcoin holdings.

Its goal is to use the funds to repurchase its stock, which has crashed by over 77% from its all-time high. This brought its market capitalization to $3.13 billion.

It plans to repurchase approximately 150 million shares, representing 13.13% of its total outstanding shares. The repurchase process will continue until next October. Share repurchases are meant to take advantage of a stock that the management believes is highly undervalued.

Indeed, valuation multiples indicate that the company has become a bargain compared to its position a few months ago. Its market NAV multiple has plunged below 1, recently.

It is also intended to attract new investors to the company and prevent some of its existing shareholders from selling.

The management also noted that it may decide to use the funds to continue accumulating Bitcoin. It now holds 30,823 coins valued at about $3.1 billion. At Bitcoin’s peak of $126,300, its holdings were valued at nearly $4 billion.

Metaplanet raised cash backed by Bitcoin, showing management’s confidence in its future recovery. They expect Bitcoin’s rebound to ease loan repayment.

Metaplanet’s Woes Have Coincided With Those of Other Digital Asset Treasury Companies

The ongoing Metaplanet woes are similar to those being faced by other companies in the Digital Asset Treasury (DAT) industry. A closer look reveals that most of these companies have experienced significant declines in the past few months.

This pushed their NAV multiples much lower than during their peak. The MSTR stock price has crashed by over 45% from its highest level in July. It is now hovering at its lowest level since April this year. Its NAV multiple has dropped to nearly 1.

Similarly, Trump Media’s stock price has dropped to $13, a 65% decline from its year-to-date high. Other Bitcoin treasury companies, such as Bullish, KinderMD, and American Bitcoin, have also experienced significant declines.

The same is happening in other treasury assets. For example, Tron Inc. stock has dropped to $2 from a peak of $12 in August when it started its TRX accumulation strategy.

Similarly, Ethereum treasury companies like BitMine and SharpLink have all plunged by over 70% from their highest level this year.

The buybacks of Metaplanet stock and Bitcoin accumulation may not immediately lift its stock price. Bitcoin’s ongoing bear market adds uncertainty to the strategy’s impact.

Senator Cynthia Lummis Advocates for a Strategic Bitcoin Reserve

Senator Cynthia Lummis reaffirmed her pro-crypto stance in Washington. She urged the U.S. government to consider a Strategic Bitcoin Reserve. Her support highlights growing interest in Bitcoin-backed fiscal strategies.

Lummis has advocated for spending billions of dollars annually on Bitcoin accumulation. It’s a move she believes will help the country pay down some of its $37 trillion debt.

Donald Trump has also supported establishing such a reserve. It’s a move that experts believe will not be easy. This would require a vote in the House of Representatives and the Senate.

Republicans hold a slim majority in the House and in the Senate, where they will need 60 votes. A Strategic Bitcoin Treasury would likely boost Bitcoin’s price. It could also lift stocks like Metaplanet and Strategy.