The recent surge in Bitcoin demand in Japan can be traced back to US President Donald Trump’s pro-crypto stance. One hotelier’s decision to stockpile Bitcoin has led to extraordinary returns for its shareholders.
Metaplanet Inc. Posts Record Gains
Shares of Metaplanet Inc. have skyrocketed by nearly 4,800% in the past year, marking the largest gain among Japanese equities. This growth is among the highest in the world, according to Bloomberg data. Bitcoin itself reached a record high of $109,241 on January 20, coinciding with Trump’s inauguration, though it has since experienced some fluctuations due to global instability exacerbated by his trade policies.
Metaplanet, a company aiming to replicate the success of Michael Saylor’s Bitcoin strategy, has seen dramatic growth. The Virginia-based MicroStrategy Inc. has already invested over $45 billion into Bitcoin, transforming itself into a Bitcoin-heavy proxy.
Shift to a Bitcoin-First Strategy
Simon Gerovich, CEO of Metaplanet and former Goldman Sachs equity derivatives trader, explained that his company shifted to a “Bitcoin-first strategy” in 2024 after a pandemic-induced slowdown. Originally focused on hotel development, Metaplanet, formerly known as Red Planet Japan Inc., closed all but one of its hotels and embraced cryptocurrency.
Metaplanet’s shareholder base has expanded by 500% in 2024, now nearing 50,000 investors. Many of these shareholders are retail investors, many of whom have limited experience with volatile crypto assets.
Navigating a Volatile Market
Rhiannon Ewart-White, an equity analyst at Storm Research, emphasized the risks involved with Metaplanet’s high exposure to retail investors. She highlighted the importance of clear communication to ensure that shareholders understand the company’s strategy.
After reporting a ¥350 million ($2.3 million) operating profit for the fiscal year ending December 2024, Metaplanet is set to see further growth in its stock price. This marks a significant turnaround after six consecutive years of losses.
Trump’s Influence on Bitcoin Demand
Gerovich noted that the excitement surrounding a more Bitcoin-friendly regulatory environment in the US has contributed to a surge in demand for Bitcoin in Japan. This enthusiasm has had a profound impact on Metaplanet’s stock performance.
Metaplanet is not alone in this approach. Remixpoint Inc., a Japanese software developer, announced plans in September to purchase ¥1.2 billion worth of Bitcoin. This has led to a 300% increase in its stock price.
The Appeal of NISA
A significant portion of Metaplanet’s retail investors have purchased shares through Japan’s revamped Nippon Individual Savings Account (NISA) program, which encourages long-term investments for savings and retirement. For many first-time investors, this program offers a convenient and tax-efficient way to invest in Bitcoin proxies.
Among these investors is 18-year-old robotics student Getto Hagiya, who became excited about Bitcoin after hearing Trump’s crypto policies. Hagiya’s decision to invest was also influenced by Metaplanet’s offer of free Bitcoin-themed merchandise at shareholder meetings.
Capitalizing on Japan’s Economic Conditions
Gerovich, an Australian national, believes that Japan’s ongoing yen depreciation makes the country an attractive market for Bitcoin. He views Bitcoin as a hedge against potential monetary instability.
As of January 28, Metaplanet held 1,762 Bitcoin, valued at approximately $172 million. The company plans to increase its holdings to 10,000 Bitcoin by the end of 2025 and 21,000 by 2026. To finance these purchases, Metaplanet intends to issue 21 million shares through moving strike warrants.
Expanding Beyond Bitcoin
Metaplanet’s plans include rebranding its remaining hotel in Tokyo’s Gotanda area as “The Bitcoin Hotel” later this year. The hotel will host Bitcoin-related events and seminars, further cementing the company’s Bitcoin-first strategy.
Despite its profitable but small hotel business, experts like Ewart-White warn that the company’s fortunes are closely tied to Bitcoin’s performance. A significant downturn in Bitcoin prices could prove challenging for Metaplanet’s business model.
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