Metaplanet’s Bitcoin Strategy Faces Market Risks As Stock Surges 330%, Experts Urge Caution
In Brief
Metaplanet continues Bitcoin purchases as part of its strategy to build a treasury reserve, but experts warn of market risks and recommend a more cautious approach amid rising leverage and overbought conditions.
According to Arkham Intelligence, a cryptocurrency exchange platform and public data application, the company with a strategic focus on Bitcoin, Metaplanet, received another test transaction a few hours ago.
A test transaction typically involves a small, initial movement of funds conducted to verify that the system operates as intended before committing larger sums of capital. In the case of Metaplanet, this transaction could be related to the process of adding Bitcoin to its treasury. The company may be testing the execution of on-chain transactions, confirming their accuracy, and ensuring proper tracking and reporting within its internal systems.
In recent months, Metaplanet has consistently acquired Bitcoin as part of its broader strategy to incorporate the leading cryptocurrency as a reserve asset for its treasury. The company stated that this decision was made to protect against the challenging economic conditions in Japan, where the national currency has faced depreciation against the US dollar.
As per the data from CoinGecko, the company’s continuous Bitcoin purchases have helped position it among the top 20 public companies holding Bitcoin.
Just last week, the Tokyo-listed firm acquired an additional 463 BTC for $53.7 million, continuing its strategy of accumulating the world’s largest cryptocurrency. This brings the total amount of Bitcoin held by the company to 17,595 BTC, which was acquired for roughly $1.78 billion at an average price of $101,422, as confirmed by its CEO, Simon Gerovich.
This acquisition followed Metaplanet‘s recent announcement of plans to raise up to 555 billion yen or $3.7 billion US dollars by issuing new perpetual preferred shares to further support its Bitcoin-buying strategy.
Metaplanet’s 330% Stock Surge Raises Concerns Of Market Risk
As noted by Maksym Sakharov, co-founder and CEO of WeFi, a decentralized on-chain bank, while Metaplanet’s stock has seen a 330% increase over the past year, it may be wise to consider a pause or more cautious approach at this point.
“On-chain data indicates elevated leverage and open interest, while the daily RSI is flashing toward overbought territory amid greedy conditions, signaling a market ripe for shakeouts. Technical desks already see Bitcoin stalling in the $120k–130k band and warn of swift corrections if sentiment turns,” he told Mpost.
“Against that backdrop, another jumbo ticket raises concentration risk: a $20k retrace would vaporize nearly a third of today’s outlay. Strategically, pausing or at least switching to staggered, cash-financed purchases could preserve liquidity and reassure investors that the firm isn’t over-gearing itself at peak euphoria. In short, confidence is admirable, but discipline now might save pain later,” he added.
Maksym Sakharov emphasized that, considering the present technical indicators and the high levels of market leverage, buyers such as Metaplanet should implement risk management strategies. These include establishing conservative limits on allocations and employing downside hedges to mitigate the frequent volatility inherent in cryptocurrency trading. By adopting a cautious approach, particularly in anticipation of potential market pullbacks, buyers can effectively manage risk and leverage Bitcoin’s volatility to their advantage rather than being adversely affected by it.
“By taking advantage of lower prices to strengthen their holdings, rather than investing overly aggressively when the market may be overheated, they lower their risk of needing to liquidate assets to boost their working capital further down the line. They say that Rome wasn’t built in a day, and neither is the type of strategic core that Metaplanet is looking to hold,” he said to Mpost.
Commenting on how continued aggressive BTC purchases at high price points might affect investor sentiment if a sharp correction occurs, the expert said, “Clearly, Metaplanet’s stock price is closely linked to Bitcoin’s upside. Continuing to purchase at high price points could be seen as a sign of inexperience or excessive aggression if a sharp correction were to occur. On the other hand, some investors may admire the company’s commitment to rallying with Bitcoin, even if that means buying at inflated levels.”
According to Maksym Sakharov, much of the perception surrounding Metaplanet will depend on how clearly the company communicates its ongoing purchasing behavior, or the absence of it. If the company successfully develops a well-reasoned explanation of the strategies behind its aggressive buying, it can help alleviate concerns among investors who might view such purchases as occurring late in the market cycle.
He also emphasized that developing these strategies and conveying them clearly holds value.
“In fact, during times of volatility, these strategies are likely to be viewed as essential for justifying their actions to investors or shareholders. These groups want to perceive actions by companies like Metaplanet as smart, disciplined buying rather than the result of lucky guesses,” he said to Mpost. “Whether acquisitions are staggered over time (e.g., weekly, monthly) or triggered by specific events (e.g., a price correction of a certain percentage), a balanced approach that minimizes emotional influence in the purchasing process is a crucial step toward long-term stability. Without this, corporate Bitcoin treasuries may risk having their stock value too closely tied to the value of BTC,” he added.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
