According to the latest advertisement of Japanese investment firm Metaplanet Inc., its bitcoin holdings have increased, reaching 530,717 btc as of October 3.
As the Tokyo-listed company revealed, this surge in its bitcoin holdings was made possible by a smart options trading strategy, leading to the company earning more btc and adding them to its portfolio.
What was the smart option strategy?
According to Metaplanet, He earned approximately 23,972 btc, which is equivalent to around $1.40 million at current prices, by selling bitcoin put options and collecting premiums.
The firm revealed that this was possible by entering a btc options trade with QCP Capital, selling 223 bitcoin puts with a strike price of $62,000 per bitcoin. The company further explained:
By selling 223 bitcoin puts, the Company can increase its bitcoin holdings if the market price falls below the strike price of $62,000 per bitcoin at expiration.
The expiration date of these options is set for December 27, 2024. In particular, Metaplanet's decision to use put options allows The company will increase its btc holdings to improve its financial position, supporting its long-term asset growth strategy. The advertisement said:
This strategy not only enhances the Company's bitcoin reserves, but also strengthens 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 to profitability.
Additionally, margin collateral was used in the company's options trading. According to the announcement, the The margin of guarantee for this options strategy was around $13.8 million, coming from new capital obtained through share acquisition rights.
Furthermore, this guarantee ensures that the company's current btc holdings are not used or hedged for the strategy.
Reason behind options trading move
Simon Gerovich, CEO of Metaplanet, x.com/gerovich/status/1841721457560453425″ target=”_blank” rel=”noopener nofollow”>elaborated about the options strategy in a post about x, explaining that by selling puts, the company “capitalizes” on btc volatility to generate premiums. ThThis allows Metaplanet to earn additional btc without completely relying on market purchases.
<blockquote class="twitter-tweet”>
Notice on bitcoin Put Options Trading… https://t.co/7zvDq70xln
– Simón Gerovich (@gerovich) twitter.com/gerovich/status/1841721457560453425?ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow”>October 3, 2024
Gerovich particularly emphasized that this approach helps increase the company's bitcoin reserves and provides an “additional revenue stream.”
Furthermore, he noted that the dual strategy of direct holdings and return-generating instruments such as options allows for profit generation, which aligns with the company's goal of accumulating more bitcoin over time.
The Metaplanet CEO further reaffirmed his commitment to maximizing his btc holdings in the long term. He mentioned that Metaplanet sees value in diversifying its btc accumulation approach through direct purchases and return-generating strategies such as options trading.
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