Kenneth Rogoff, a well-known American economist, recently published "Our Dollar, Your Problem", analyzing the role of the US dollar in the global financial system and how cryptocurrencies affect the dollar's hegemony. He also refuted Buffett, saying that cryptocurrency is not a scam but has real value.
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ToggleKenneth Rogoff: "Our Dollar, Your Problem"
Kenneth Rogoff is an American economist and currently the Maurits C. Boas Professor of International Economics at Harvard University. He served as chief economist of the International Monetary Fund (IMF) from 2001 to 2003 and has held positions at institutions including the Federal Reserve and Princeton University.
Rogoff recently published "Our Dollar, Your Problem" , analyzing the role of the US dollar in the global financial system and how cryptocurrencies affect the dollar's hegemony. He believes that while cryptocurrency cannot completely replace the dollar, its influence in the underground economy is rising. He warned that the dollar's dominance can no longer be taken for granted! Rogoff recently gave an exclusive interview to Bloomberg . The following are excerpts from the interview.
Kenneth Rogoff: The dollar is declining
This book provides a comprehensive account of the rise of the dollar after World War II, including how it reached such high levels and how its competitors were eliminated. The dollar is not just becoming the number one currency; it is becoming more dominant than any other currency.
But Rogoff believes the dollar is on the decline. The renminbi is breaking free from the shackles of the dollar and the euro will play a greater role, as has been the case for a decade.
Rogoff also mentioned cryptocurrencies, as one of the main markets for the U.S. dollar is the world’s underground economy. There, the government does not control everything.
Can Cryptocurrency Replace the Dollar in the Underground Economy?
Many people ask: Can cryptocurrency replace the US dollar?
In the legal economy, governments have a lot of influence, and here cryptocurrencies cannot replace the dollar. But in the underground economy, the government has much less influence.
The so-called underground economy can include illegal activities and tax evasion. Tax evasion is a serious problem around the world. The average for developed economies is between 15-20%. The United States is among the lowest, at less than 15%. But in most developed economies, especially Europe, the share is much higher. In developing economies, this proportion accounts for one-third of GDP.
There are also many gray areas and shadow economies, such as people using cash to pay for certain expenses, arms trade, human trafficking, drugs, and so on.
According to Rogoff's research, the underground global economy may account for 20% of global GDP. This is a huge market, and the US dollar dominates it.
Bitcoin has eroded the dollar’s dominance
While cryptocurrency has yet to make significant inroads into the legitimate economy, it is increasingly used in the global underground economy — including criminal activities, but primarily tax evasion and regulatory avoidance — in which cash, especially the U.S. dollar, has always dominated. The idea that there is no "fundamental value proposition" in transactional use is wrong. There are also many countries that use cryptocurrencies to evade US financial sanctions.
In a way, cryptocurrencies are simply replacing U.S. dollars in cash, which is nearly untraceable. Encryption technology provides new ways to conceal transactions that previously passed through normal financial channels, so the impact of information loss on national security is much greater. With much of the rest of the world unhappy with the United States’ excessive control over the financial system, the challenge for U.S. regulators has become more difficult, which is one of the main reasons why we may see a continued shift away from the dollar and into other trading instruments.
Refuting Buffett, Cryptocurrency is not a scam, Cryptocurrency has value
Masters including Buffett believe that cryptocurrency is a scam, but in the crypto chapter of this book, the author explains why this is completely wrong.
Because if the underground economy was 20% of global GDP, it would be a $20 trillion to $25 trillion economy. If you offer a means of exchange, that’s a value proposition. From this perspective, cryptocurrencies have value. It is used for trading. Even if cryptocurrencies were strictly regulated, it would be difficult for governments to control a large part of the economy. So it's not worthless.
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.
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.
