According to the latest announcement from Japanese investment firm Metaplanet Inc., its Bitcoin holdings have surged, rising to 530.717 BTC as of October 3.
As revealed by the Tokyo-listed company, this increase in its Bitcoin bags was possible due to a smart options trading strategy, which led to the company earning more BTC and adding it to its portfolio.
What Was The Smart Option Strategy?
According to Metaplanet, it earned roughly 23.972 BTC, equating to around $1.40 million at current prices, by selling Bitcoin put options and collecting premiums.
The firm revealed this was possible by entering a BTC options transaction with QCP Capital, selling 223 Bitcoin put options with a strike price of $62,000 per Bitcoin. The company further explained:
By selling 223 Bitcoin put options, the Company is able to increase its Bitcoin holdings if the market price falls below the strike price of 62,000 USD per Bitcoin at maturity.
The maturity date for these options is set for December 27, 2024. Notably, Metaplanet’s move to utilizing put options allows the firm to increase its BTC holdings to enhance its financial position, supporting its strategy for long-term asset growth. The announcement read:
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.
Furthermore, margin collateral was used in the company’s options trading. According to the announcement, the margin collateral for this options strategy was around $13.8 million, sourced from new capital raised through stock acquisition rights.
Additionally, this collateral ensures that the firm’s current BTC holdings are not used or hedged for the strategy.
Reason Behind The Option Trade Move
Simon Gerovich, CEO of Metaplanet, elaborated on the options strategy in a post on X, explaining that by selling put options, the firm “capitalizes” on the volatility of BTC to generate premiums. This enables Metaplanet to earn additional BTC without relying entirely 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…
— Simon Gerovich (@gerovich) October 3, 2024
Gerovich particularly emphasized that this approach helps grow the firm’s Bitcoin reserves and provides an “additional income stream.”
Furthermore, he pointed out that the dual strategy of direct holdings and yield-generating instruments like options allows for profit generation, which aligns with the company’s goal of accumulating more Bitcoin over time.
The Metaplanet CEO further reaffirmed its commitment to maximizing its long-term BTC holdings. He mentioned that Metaplanet sees value in diversifying its BTC accumulation approach through direct purchase and yield-generating strategies like options trading.
Featured image created with DALL-E, Chart from TradingView
