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Investing.com-- Metaplanet Inc (TYO:3350) on Monday said it had purchased more Bitcoin as part of its treasury strategy, although shares of the Japanese hotelier fell further amid some signs of cooling investor sentiment.
Metaplanet said it had purchased 136 Bitcoin for about $15.2 million, at an average price of $111,783 per coin. This brought its Bitcoin holdings to a total of 20,136 coins, keeping it as the sixth-largest corporate holder of the crypto, behind recently listed exchange Bullish Inc (NYSE:BLSH).
But Metaplanet’s shares fell 2.3% in Tokyo trade on Monday, extending a nearly 20% rout from the past week. Shares of the hotelier turned Bitcoin treasury were at a near four-month low.
Bitcoin traded around $111,000 on Monday.
Metaplanet’s shares clocked extended losses in recent weeks, tracking a similar drop in Bitcoin’s price after the world’s biggest cryptocurrency was hit by a wave of profit-taking from August record highs.
Losses in Bitcoin also saw increasing doubts emerge over the viability of the Bitcoin treasury strategy, given that retail investors seeking exposure to the crypto can instead invest in exchange-traded funds.
Shares of Strategy, formerly MicroStrategy (NASDAQ:MSTR), logged a nearly 17% loss in August on this notion. The company is the world’s biggest corporate holder of the crypto with 636,505 coins.
Strategy found great success with its Bitcoin purchasing since late-2023, as the company’s valuation soared in tandem with the world’s biggest crypto. The company funded its purchases through a slew of outsized share and debt issuances.
Several new entrants, including Metaplanet and meme stock Gamestop, have attempted to replicate this strategy, albeit to middling success. Metaplanet has also drawn scrutiny over its market valuation, at around $5 billion, being greater than the value of its Bitcoin holdings.
Critics of the Bitcoin treasury strategy have warned that investing in Bitcoin makes a company’s shares more vulnerable to volatility in crypto markets. Crowding in the sector also stands to potentially limit future returns from investing in treasury companies.