The Japanese version of MicroStrategy Metaplanet's stock price has fluctuated greatly recently. Since its transformation into a Bitcoin reserve strategy company, it has successfully attracted investors' attention and its stock price has increased nearly seven times in one year. This article will introduce Metaplanet's business model and provide readers with several ways to evaluate Metaplanet's stock price for reference.
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ToggleMetaplanet, a hotel operator transformed into a Bitcoin reserve strategy company
Metaplanet (3350.T) is a company founded in 1999 with the Hotel Royal Oak and listed on the Tokyo Stock Exchange (TSE) in 2004. Among its many businesses, it also includes Web3 consulting business. However, the company has not had good profit performance in the past few years and its stock price has been quite sluggish.
In April 2024, Metaplanet announced that it would follow the example of MicroStrategy and launch a Bitcoin investment strategy, using a variety of financial instruments to support this goal, including issuing bonds and stocks. It has currently purchased 7,800 Bitcoins, making it the listed company with the most Bitcoins in Asia. This strategy has earned it great attention in the Japanese market and has been included in multiple global and Japanese ETFs.
The hotel operated by Metaplanet is undergoing renovation and will be renamed the "Bitcoin Hotel". The hotel will have a Bitcoin gallery, art museum and shared workspace to provide a good communication environment for the crypto community.
Metaplanet’s Bitcoin Strategy: Continuous Buying + Option Profits
Through a series of additional stock issuances, bond issuances and Bitcoin purchase plans, Metaplanet has demonstrated a long-term Bitcoin strategy similar to that of the US Strategy (formerly known as MicroStrategy).
In addition to buying Bitcoin directly, Metaplanet also conducts Bitcoin option transactions with Singapore digital asset trading company QCP Capital, collecting premiums by selling options. It also occasionally conducts roll-up transactions to increase the execution price to increase Bitcoin premium income. Metaplanet calls it “target buying,” emphasizing that it is another way to acquire Bitcoin.
In its latest financial report , revenue in the first quarter of 2025 reached 877 million yen, of which 88% came from Bitcoin options trading.
( Metaplanet uses option roll-up transactions to increase Bitcoin profits )
How to evaluate Metaplanet's share price?
Metaplanet's stock price soared after adopting a Bitcoin investment strategy. How should investors evaluate its stock price? The author provides the following three evaluation indicators:
P/B ratio
Traditional finance uses the Price-Book Ratio (PB) to evaluate a company's stock price. The P/B ratio is the ratio of the stock price to the book value per share. The book value represents the company's actual value or liquidation value. If we do not consider the company's other assets and simply use the value of Bitcoin to represent the company's liquidation value, we can also come up with a P/B ratio.
P/B ratio = stock price / value of Bitcoin per share
Based on Friday's closing price of 816 yen, the USD/JPY exchange rate of 142.6, and the Bitcoin price of 108K, its P/B ratio is 5.09.
mNAV
Another algorithm, mNAV, has a similar meaning. Strategy's official website uses this algorithm.
mNAV=Enterprise Value÷Bitcoin NAV
- Enterprise Value: Stock market value + total liabilities (including convertible bonds and preferred shares)
- Bitcoin NAV: The market value of Bitcoin held
NAV premium
Strategy Tracker is a website that specializes in analyzing Bitcoin reserve strategy companies. It also has various data and indicators at the top of the main page. It also calculates an indicator similar to mNAV, called NAV Premium, but the algorithm is slightly different.
NAV premium = Market Cap (stock market value) ÷ Bitcoin NAV (value of bitcoin held)
NAV premium does not take into account convertible bonds and preferred stocks. But it is divided into NAV Premium (Basic) and NAV Premium (Diluted), one is calculated using the existing number of outstanding shares, while the other takes into account shares converted afterwards. The author believes that it is necessary to look at NAV Premium (Diluted) to know the dilution status of one's equity in the future. Unfortunately, the historical data provided by its statistical chart is NAV Premium (Basic). The current indicator is 4.055, while NAV Premium (Diluted) is currently 5.125.
These indicators are similar to the concept of the traditional stock P/B ratio. The higher the number, the more expensive the company's stock price is relatively.
Is Metaplanet's current share price overvalued?
Since launching its Bitcoin investment strategy in April 2024, Metaplanet has used a variety of financial instruments to support this goal, planning to purchase a total of 10,000 Bitcoins by the end of this year and accumulating 21,000 Bitcoins by 2026.
Metaplanet has a clear financial plan, including future share subscription rights for issuance, totaling 21 million shares in five tranches. Benefiting from Japan's tax system and its convenience for retail and institutional investors, its NAV premium has remained high for a long time. As can be seen from the above figure, its NAV premium was as high as 21 times at one point, and was close to 2 times at its lowest.
So how do you determine whether Metaplanet's stock price is overvalued? There are nearly a hundred Bitcoin reserve strategy companies on the market. In addition to the ancestor MicroStrategy, I think the most stable and confident one for long-term investment is Metaplanet! Because it has formulated a clear financial plan and is actively and systematically developing towards its goals, investors can use numbers to analyze its stock price and make decisions based on entry and exit decisions.
The P/B ratio that I use is actually similar to NAV premium, so I will cross-check my self-calculated numbers with NAV premium’s historical data to find out the relative highs and lows of its stock price for investment.
Based on Friday's closing price of 816 yen, the USD/JPY exchange rate of 142.6, and the Bitcoin price of 108K, the current P/B ratio is 5.09. If a total of 10,000 bitcoins are purchased by the end of the year and the equity is diluted (a total of 21 million shares were issued this year), the stock price should reach 1,003 yen (marked in light orange in the figure below) under the same P/B ratio.
In the current situation, if the P/B ratio drops to 4, the stock price should fall to 640. If investor optimism heats up by the end of the year, under the same conditions, its stock price has the opportunity to reach 1,180 (P/B ratio of 6) and 1,380 (P/B ratio of 7). Using this method, you can adjust and evaluate your entry and exit points at any time.
Stocks such as MicroStrategy and Metaplanet, which are considered as Bitcoin proxies, are also considered as Bitcoin leverage investment tools. Naturally, when Bitcoin rises, the P/B ratio tends to rise, and when Bitcoin falls, the P/B ratio will also fall. Therefore, the investment strategy can be adjusted at any time to respond to the trend of Bitcoin.
Metaplanet becomes a new target for arbitrage, please DYOR your investment
Metaplanet's stock price has experienced huge fluctuations recently. In addition to ranking first in terms of volatility, it is also the company with the highest short selling ratio. Metaplanet, which is listed in Japan and the United States, has become a new target for arbitrageurs. In addition to being able to use long and short arbitrage between Bitcoin and stock prices like MicroStrategy, it can also use its multiple listed stocks for arbitrage.
It can be seen that in addition to becoming the listed company with the most Bitcoins in Asia, Metaplanet has also gained extremely high attention in the financial market. As for whether such highly volatile stocks are suitable for investment, it also depends on each person's risk attributes. This article is only the author's personal opinion and is not an investment advice. Please be sure to DYOR.
Risk Warning
Cryptocurrency investments carry a high degree of risk, their prices may fluctuate dramatically, and you may lose all your investment. Please assess the risks carefully.
After more than two years, stablecoin issuer Circle has once again submitted its IPO documents. After experiencing a bear market downturn, is Circle's operations back on track? ABMedia will compare Circle’s financial statements since 2021 to give you a glimpse into its financial status and operating model.
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ToggleThe rise of Circle
Stablecoin is a type of cryptocurrency that maintains the stability of its value through the support of collateral assets or algorithms. The current market value of stablecoins is US$238 billion, an increase of more than 80% from the end of 2022 (US$130 billion). USDT's US$144 billion and USDC's US$60.6 billion account for 85% of the market. The market value of stablecoins accounts for approximately 8.6% of the total market value of cryptocurrencies, and they are an important bridge between traditional finance and cryptocurrencies.
USDC, which has long been the second-largest stablecoin by market value, was originally managed by the Center Consortium, an alliance between Circle and cryptocurrency exchange Coinbase in 2018.
Circle and Coinbase formed an alliance to jointly manage the Center Consortium, which was responsible for the issuance of USDC. It was officially terminated in August 2023. According to reports at the time , Circle and Coinbase believed that as the regulation of stablecoins in the United States and around the world became increasingly clear, the requirement for an independent governance body like Centre was no longer a problem. Circle will continue to serve as the issuer of USDC, bringing the Center’s governance and operational responsibilities within Circle. The new structure will simplify operations and governance and enhance Circle’s direct responsibilities as issuer, including holding all smart contract keys, complying with reserve governance regulations, and enabling USDC on new blockchains.
Circle's huge reserves earn high profits from US Treasury bonds
Circle's main source of profit is reserve interest income. Circle's huge stablecoin USDC is invested in the U.S. bond market through U.S. dollar reserves, providing investors with the reserve guarantee they need. It is also its main source of income. In particular, the Federal Reserve has maintained interest rates at a high level in recent years. USDC has placed a large amount of reserves in the money market fund managed by BlackRock, charging high interest rates on U.S. Treasury bonds, and achieved revenue of US$1.676 billion in 2024. In the past two years, reserve interest income has accounted for 99% of its total revenue. However, because USDC is issued in cooperation with Coinbase, its interest income needs to be split with Coinbase.
In addition, Circle also charges its customers transaction and service fees, but these fees are insignificant compared to interest income, accounting for only 1% of its total revenue in the past two years.
Circle also stated in the report that the company is focusing on its core products and has discontinued businesses such as Circle Yield (lending market) and seed investment.
Circle's gross profit margin has been declining year by year, and Coinbase has taken over
Circle’s direct costs include interest income from its reserves, which it shares with Coinbase, and fees associated with trading. The percentage of operating income minus direct costs to revenue is the so-called gross profit margin. From 2020 to 2024, Circle's gross profit margin dropped from 77% to 39%, most of which was reserve promotion fees distributed to the exchange Coinbase.
Coinbase's share of USDC reserve promotion fees from Circle each year is:
- 2024: $908 million, or 55% of Circle’s reserve revenue
- 2023: $691 million, or 48% of Circle’s reserve revenue
- 2022: $248 million, 34% of Circle’s reserve revenue
Circle operating expense analysis
Circle's largest operating expenses are:
- Compensation expenses: accounting for about 50% of operating expenses, this expense includes employee salaries, equity incentive plans, employee retirement and welfare plans, etc.
- General and administrative expense: Expenses incurred to support business operations, accounting for 20% to 30% of operating expenses. The increase in expenses mainly comes from legal consulting fees. Circle may not be able to reduce this expense as it strives to comply with regulations and prepares for a public listing.
We use the cost to income ratio to measure. Circle's cost to income ratio (100% is break-even) has been declining year by year from 361% in 2020 to 76% in 2024.
Is stablecoin really a good business?
Although I fully agree with Circle's approach in recent years of focusing on core products and cutting unnecessary and high-risk services in order to achieve compliance with the listing regulations.
But its reserve interest income accounts for 99% of its revenue, which is too concentrated! Because the level of interest rates is affected by macro conditions and is not something Circle can control, from a bank's perspective, it is unreasonable for Circle to absorb a large amount of deposits but can only earn returns by investing in the safest U.S. Treasury bonds. If it cannot lock in the interest rate spread through a lending model like a bank, what Circle should do is to increase fee income, such as enhancing the connection between existing payment channels and payment and settlement of digital assets to increase the number of customers and transaction volume.
We can observe that Circle's reserve yield rate has risen from 2.86% in 2022 to 4.89% in 2023, and then to 5.09% in 2024, which has also driven Circle's revenue to continue to rise. In addition to the amount of USDC issued, another important factor is the interest rate of US Treasury bonds. Now that the Federal Reserve has started a cycle of interest rate cuts, although it has only been reduced by 1% since the end of 2024, it will also have a significant impact on Circle, which is highly dependent on interest income.
Dragonfly limited partner @TheOneandOmsy also pointed out that Circle's high distribution costs squeeze its gross profit margins, and the potential relaxation of US regulations may attract traditional financial institutions to enter the market, which will also threaten its market position.
What is the market value of Circle?
Circle calculates its net book value as of December 31, 2024 to be $1.178 billion, or $20.90 per share.
According to data provider PitchBook, after a round of financing in 2022, Circle's valuation reached US$7.7 billion. And now there is a greater chance of reaching $9 billion.
In other words, if Circle can successfully go public, its stock price may be between US$21 and US$160. Such a huge gap depends on whether investors are optimistic about the prospects of stablecoins.
Risk Warning
Cryptocurrency investments carry a high degree of risk, their prices may fluctuate dramatically, and you may lose all your investment. Please assess the risks carefully.
