Metaplanet Confirms It Sold 10,000 BTC But Bought it All Back, For Liquidity Test

Japanese Bitcoin treasury firm Metaplanet disclosed today that it sold 10,000 BTC ($789.3 million) days ago. As of September 30, it had repurchased the entire BTC stash, including an additional 1,000 BTC. This means it bought 11,000 BTC (worth $948.8 million) in total.

Following this BTC liquidity test, Metaplanet’s total bitcoin holdings are 44,000 BTC, currently worth over $3.78 billion.

Why Sell and Repurchase BTC?

Notably, this will be the first time Metaplanet will sell BTC.

Metaplanet explained that it sold the BTC holdings to prove its creditworthiness to potential institutional lenders and credit rating agencies.

Justifying its recent sale and repurchase, the Japanese company wrote:

“From the perspective of credit rating agencies and fixed income investors, […] what matters is not only that an asset can be sold in the market, but whether the issuer has the ability and willingness to actually sell that asset when needed and apply the proceeds to meeting its obligations.”

Bitcoin currently accounts for the majority of Metaplanet’s assets. So the firm decided to sell some of its BTC stash to show that it can sell its bitcoin if there is ever a need to convert it to cash.

With this move, the firm believes it can gain access to “future financing, including corporate bonds and preferred shares, with the ultimate objective of increasing” its BTC holdings.

Recall that Strategy, the leading BTC treasury firm, has previously sold BTC to prove this same point.

Metaplanet Repurchases BTC at a Loss

Metaplanet added that its BTC sale resulted in a capital loss. It sold the 10,000 BTC at an average price of $78,939 per BTC. This means that it had $789.3 million after the sale. Then, the firm reacquired the 10,000 BTC, at which point each BTC sold for $86,263. In the end, it spent $862.6 million to purchase the same quantity of the same asset.

Based on the United States’ tax guidelines, capital losses can be used to offset future capital gains to lower tax bills. As a result, Metaplanet can decide whether to include a Deferred Tax Asset on its balance sheet to reduce future tax obligations.

Although the Japanese firm’s stock is actively trading in the U.S., it is worth noting that it is not a corporate taxpayer in the U.S.

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