Metaplanet sells BTC put options, earns 23.97 BTC in premium income

Japanese investment firm Metaplanet reported earnings of 23.97 BTC, or about $1.4 million, after selling put options to QCP Capital, a Singaporean digital asset trading firm. 

The transaction between both entities involved 223 Bitcoin put option contracts with a maturity date of 27 December 2024. According to Metaplanet’s report, the strike price at maturity is set at $62,000 per BTC. 

The premium averaged 0.1075 BTC per contract, and the margin collateral was $13.826 million. The nominal yield settled at 10.75%, while the annual yield sat at 45.63%.

Metaplanet to use proceeds to purchase more Bitcoin

*Metaplanet sells $BTC put options, earns 23.97 $BTC in premium income* pic.twitter.com/w8qO0fifr1

— Metaplanet Inc. (@Metaplanet_JP) October 3, 2024

Metaplanet said in its Thursday report that the transaction was initiated to allow the company to maximize gains on Bitcoin’s volatility while concurrently holding a cash-secured position. The company emphasized that the proceeds will increase its Bitcoin holdings when the market price falls below the $62,000 strike price when the options mature in December.

Metaplanet said in the report that the transaction is favorable for maintaining and promoting its financial strategy of strengthening its Bitcoin exposure. The transaction will reinforce Metaplanet’s balance sheet and enhance the company’s BTC reserves.

“This strategy not only enhances the company’s Bitcoin reserves but also reinforces its balance sheet, aligning with our ongoing financial strategy to strengthen long-term Bitcoin exposure and improve the company’s financial position, supporting its path toward profitability.”

–Metaplanet 

Options are financial derivatives that give buyers the right to buy or sell an asset at a stated price within a given duration. The put options gave Metaplanet the right but not the obligation to sell BTC at the set strike price on or before the expiration date.

The buyer will usually exercise the right if Bitcoin’s price plunges below the strike price by expiration. As a result, the seller of the put option is obliged to purchase the bitcoin from the holder at the agreed strike price.

Metaplanet also issued an update on its Bitcoin holdings in the report. The company received 23.972 bitcoins at an average price of 8,950,000 yen each. Its total holdings now sit at 530.717 Bitcoin with an average purchase price of 9,354,425 yen per BTC.

Metaplanet buys more BTC worth 1 billion yen

The news comes after the crypto investment firm purchased an additional 107.913 Bitcoin valued at approximately 1 billion yen on October 1st. The transaction brought the average purchase price to 9,266,724 yen per BTC. Metaplanet has recently shown efforts to ramp up its Bitcoin-oriented activities and maximize profits.

On August 8th, 2024, the publicly traded Japanese company announced it had secured a loan of 1 billion yen ($6.8 million) to purchase additional Bitcoin. According to the announcement, the company secured the loan at a 0.1% annualized percentage return (APR). 

Due to its aggressive Bitcoin acquisition strategies, the firm is often dubbed “Asia’s Microstrategy” after the U.S.-based software company widely known for being the first public company to adopt Bitcoin as its primary treasury reserve asset.

Bitcoin is currently changing hands at $60,960.22. The asset’s floor price has barely changed in the last 24 hours, recording a slight dip of 0.42% and a 5.27% drop in the last seven days.