According to the latest announcement from the The Japanese investment company Metaplanet Inc., whose Bitcoin holdings increased, rose to 530.717 BTC as of October 3.
As revealed by the Tokyo-listed company, this increase in its Bitcoin wallets was possible thanks to a smart options trading strategy, which led the company to acquire more BTC and add it to its portfolio.
What was the Smart Choice Strategy?
According to Metaplanet, it received approximately 23.972 BTC, equivalent to approximately $1.40 million at current rates, by selling Bitcoin put options and collecting premiums.
The company stated that this is possible through logging a BTC options transaction with QCP Capital, selling 223 Bitcoin to put options with a strike price of $62,000 per Bitcoin. The company also explained:
By selling 223 Bitcoin put options, the Company is able to increase its Bitcoin holdings if the market price falls below the strike price of 62,000 USD per Bitcoin at maturity.
The maturity date of these options is scheduled for December 27, 2024. Notably, Metaplanet’s move to using put options allows. The company will increase its BTC holdings to improve its financial position, supporting its long-term asset growth strategy. The announcement read as follows:
This strategy not only improves the Company’s reserves but also strengthens its balance sheet, in line with our ongoing financial strategy to strengthen Bitcoin’s long-term exposure and improve the Company’s financial position, supporting its path towards profitability.
In addition, margin collateral was used in the company’s options trading. According to the announcement, the The margin collateral for this option plan was approximately $13.8 million, obtained from new funds raised through stock acquisition rights.
Additionally, this guarantee ensures that the company’s current BTC assets are not used or hedged.
Reason behind Option Trade Move
Simon Gerovich, CEO of Metaplanet, detailed the options strategy in a post on X, explaining that by selling put options, the company is “cashing in” on the volatility of BTC to generate premiums. Thit enables Metaplanet to earn more BTC without relying entirely on buying the market.
📢Information about bitcoin trading options…
– Simon Gerovich (@gerovich) October 3, 2024
Gerovich emphasized that this method helps to increase the company’s Bitcoin reserves and provide “additional income.”
In addition, he pointed out that the dual strategy of direct holdings and yield-producing instruments as options allows for profit generation, which is in line with the company’s goal of accumulating more Bitcoin over time.
Metaplanet’s CEO reaffirmed his commitment to increasing his long-term BTC holdings. He stated that Metaplanet sees value in diversifying its way of accumulating BTC through direct purchases and yield-generating strategies such as options trading.
The featured image was created with DALL-E, a Chart from TradingView