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Cryptocurrency News Articles
Bitcoin Holder Metaplanet Sells BTC Options to Boost Its $32M BTC Stash
Oct 03, 2024 at 05:49 pm
The company strengthens its bitcoin position with a strategic options sale, generating nearly 24 BTC ($1.44M) in premium.
Tokyo-listed bitcoin holder Metaplanet Inc. (4182) is boosting its coin stash with bitcoin (BTC) options, a move that’s setting the company apart from its U.S.-listed peer, MicroStrategy, which is known for its debt-fueled accumulation strategy.
On Tuesday, Metaplanet disclosed the sale of 223 contracts of bitcoin put options at the $62,000 strike with a maturity date of Dec. 27. The transaction had Singapore-based QCP Capital as the counterparty and generated a premium of 23.972 BTC ($1.44 million). CoinDesk reached out to QCP Capital for a comment.
Metaplanet booked $13.826 million as margin collateral, with each contract offering a 0.1075 BTC premium, which Metaplanet received upfront. The transaction resulted in a nominal yield of 10.75% and an annualized yield of 45.63%.
The $13.826 million of margin collateral came from the proceeds raised during Metaplanet's eleventh stock acquisition rights exercise. The purpose of this collateral is to ensure Metaplanet can meet the transaction if the option is exercised.
The premium Metaplanet receives from selling put options will be used to purchase more bitcoin, adding to the company’s total holdings, which now stand at 530.717 BTC ($32 million).
A put option gives the buyer the right, but not the obligation, to sell the underlying asset at a preset price on or before a specific date. Metaplanet is a put seller, meaning it is obligated to buy BTC at the strike price of $62,000, even if prices are lower on the day of the expiry.
If bitcoin's price drops below $62,000 by the maturity date, the buyer will likely exercise this option, forcing Metaplanet to buy 223 bitcoin at the higher strike price. Metaplanet's bitcoin holdings would increase by 223 bitcoin, even if the market price by Dec. 27 is lower, although the premium partially offsets the spot price risk.
If bitcoin's price is higher than $62,000 by Dec.27, the buyer is unlikely to exercise the option since they can sell bitcoin on the open market at a higher price. The option would therefore expire worthless, while Metaplanet keeps the 23.972 BTC premium as profit.
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CoinDesk is an independent operating subsidiary of Digital Currency Group, which helps to support CoinDesk's work through a combination of equity ownership and a revenue sharing arrangement. CoinDesk was acquired by Bullish, Block.one; both companies have琬琬 interests in the cryptocurrency industry and their members may personally hold a variety of cryptocurrencies.
As the senior analyst at CoinDesk, James specializes in Bitcoin and the macro environment. Previously, his role as a research analyst at Swiss hedge fund Saidler & Co. introduced him to on-chain analytics. He monitors ETFs, spot and futures volumes, and flows to understand Bitcoin.
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