Metaplanet Books $605M Loss on $3.8B Bitcoin Bet, Shifts to Preferred Shares and Options Income

Metaplanet’s treasury-first experiment just hit its first real stress test. After Bitcoin retreated from October highs, the Tokyo firm posted a full-year loss of ¥95 billion ($605 million) on ¥8.9 billion ($58 million) in revenue, driven by mark-to-market damage on a 35,100 BTC position now worth $2.4 billion.

The core issue is simple: timing and financing. Over 21 months, Metaplanet accumulated nearly $3.8 billion in Bitcoin at an average entry of $107,000 per coin. With spot trading below that level, the company sits on an unrealized loss of roughly $1.4 billion—about 37% on paper. In the quarter ending Dec. 31 alone, the stash took a ¥102 billion ($664 million) valuation hit.

Instead of retreating, the company is rewriting its capital stack. Historically it issued common stock to buy BTC; now it’s embracing preferred shares to stabilize funding and reduce sensitivity to equity drawdowns. Two instruments—MERCURY and MARS—are live. Management describes MERCURY as the first asset of its kind issued in Japan, built to withstand crypto downturns and part of a strategic pivot toward “digital credit.” Both preferreds include dividend obligations, and, echoing Saylor’s Strategy, the company is prioritizing cash reserves to pre-fund these commitments when markets wobble.

That design trades dilution risk for a quasi-fixed charge. The upside: preferred capital can be less procyclical than at-the-money equity issuance when prices are falling, giving the firm breathing room to hold BTC through volatility. The trade-off: dividends introduce recurring cash needs that don’t disappear during bear phases. If the coin sits below a $107,000 basis for long, those fixed outlays tighten the operating envelope—especially when mark-to-market losses dwarf operating cash flow.

To supplement funding, Metaplanet is monetizing volatility. Option-writing premiums became its primary revenue driver, jumping to ¥7.9 billion ($51 million) for the year from ¥691 million ($4.5 million). It projects an 81% increase in full-year operating profit from this business. That strategy can smooth earnings and reduce the “carry” of holding BTC, but it adds path-dependence: short-vol programs collect nickels against drawdowns that can still steamroll P&L. The fourth quarter shows the scale mismatch—premium income helps, yet it cannot neutralize a ¥102 billion mark-to-market hit.

Equity holders are voting with their feet. Shares edged up to ¥326 on Monday, but have fallen more than 62% over six months, tracking a 65% slide in Strategy’s stock over the same window as investors questioned dividend sustainability and potential Bitcoin sales. Prediction market traders on Myriad recently assigned a 22% probability that Strategy offloads BTC this year to bolster liquidity, with odds peaking near 35% in recent months—a useful proxy for how quickly sentiment can tighten when fixed obligations meet volatile collateral.

Operationally, the firm has paused new purchases so far this year. That restraint makes sense. With a high cost basis and fresh preferred obligations, preserving optionality matters more than scaling size. The goal now is to bridge to a healthier price regime while protecting the capital stack: keep option income steady without overloading short-gamma risk, maintain dividend credibility via reserves, and avoid issuing common into weakness unless absolutely necessary.

Metaplanet modeled itself on Saylor’s Strategy before President Donald Trump’s re-election drew in a crowd of treasury imitators. Ironically, its largest buys came late, including $630 million in September around $106,000 and $615 million in October around $108,000. The thesis hasn’t changed; the financing has. Whether the preferred-share-and-premium engine can carry a $107,000 basis through another volatility cycle is where this story goes next.