Key Points
- Metaplanet Inc has entered into a Bitcoin put options deal with QCP Capital.
- The deal aims to capitalize on Bitcoin volatility while maintaining a fully cash-secured position.
Japanese financial firm, Metaplanet Inc, recently announced a Bitcoin put options deal with Singapore-based crypto asset trading firm QCP Capital.
Put options provide the buyer with the right, but not the obligation, to sell a specific amount of an asset by a certain date. If the price of Bitcoin drops by the expiration date, the buyer can exercise their right to sell, obligating the seller of the put option to buy the Bitcoin at the agreed price.
Capitalizing on Bitcoin Volatility
The transaction between Metaplanet and QCP Capital is designed to generate premium income by capitalizing on Bitcoin’s volatility, while maintaining a fully cash-secured position.
Metaplanet sold 223 Bitcoin put options at a strike price of $62,000 per coin. At the time, Bitcoin had a market value of $61,374.72. The put options are set to mature by December 27, 2024. If the market price of Bitcoin falls below $62,000 by this date, Metaplanet could make significant profits and increase its Bitcoin holdings.
This strategy strengthens Metaplanet’s Bitcoin reserve and its balance sheet. It aligns with the firm’s financial strategy, bolstering its long-term Bitcoin exposure and improving its financial position, which supports its path towards profitability.
The premium on each contract is approximately 0.1075 Bitcoin, totalling 23.972 Bitcoin, or about $1.4 million, for all the Bitcoin put options contracts sold to QCP Capital. The transaction also includes a marginal collateral of $13,826,000.
Increasing Bitcoin Holdings
This deal was announced just days after Metaplanet significantly increased its Bitcoin holdings. The firm recently acquired another 107.913 Bitcoin, valued at about $7 million. As a result, the firm now holds more than 500 Bitcoin.
In early September, Metaplanet added 38.464 Bitcoin, worth approximately $2 million, to its holdings. The company purchased its entire Bitcoin portfolio at an average price of $65,432 per Bitcoin. These acquisitions demonstrate Metaplanet’s commitment to using Bitcoin as a strategic reserve asset and its continued confidence in the cryptocurrency.
Metaplanet’s acquisition frequency puts it in close competition with US-based business intelligence and software firm MicroStrategy Inc. MicroStrategy began its Bitcoin accumulation strategy in August 2022 and has since acquired several billion dollars’ worth of Bitcoin. After consistently purchasing Bitcoin, MicroStrategy now holds 244,800 Bitcoin, significantly more than Metaplanet’s current holding of over 530 Bitcoin.
