Bitcoin corporate treasuries were touted as a promising stock market alternative for the cryptocurrency sector. That momentum has now largely faded, to the point where Metaplanet’s valuation has fallen below the value of its BTC holdings.
Metaplanet shares down 75%
Since the beginning of the year, publicly traded companies have been buying billions of dollars worth of cryptocurrencies to build next-generation corporate treasuries. This frenzied race has now slowed significantly, to the point where some analysts are predicting that the bubble is about to burst.
The figures are not good. Just look at how 25% of Bitcoin cash reserves already had a capitalization lower than their BTC holdings last September. The situation does not seem to be improving, as it now affects iconic players in the sector such as Japan’s Metaplanet.
This alarming assessment was recently made by the financial media outlet Bloomberg. This is particularly true given that the share price is currently down 75% from its peak last June. And the 336% increase that remains effective over the past year seems to be unable to change this.
Indeed, data available on Metaplanet’s website indicates that its market net asset value (mNAV) — the ratio between the value of cryptocurrencies held and the company’s market capitalization — reached the symbolic level of 0.99 in recent hours. This is a strategic threshold that should not have been crossed.
A “strong signal” for Bitcoin treasuries
This drop below the threshold of one (1) indicates that Metaplanet now has Bitcoin assets whose total value exceeds its market capitalization, currently estimated at $3.5 billion. This is a “strong signal” for Bloomberg analysts, given that the discount puts the company “in uncharted territory.”
For crypto-asset treasuries (DATs), trading at a discount is a strong signal. These companies have experienced a marked boom this year, offering investors exposure to cryptocurrencies in a more familiar form: that of a listed stock. Demand has been such that most of them were trading at a premium to their assets during the summer. Now, Metaplanet is entering uncharted territory.
Bloomberg
Mark Chadwick, an equity analyst specializing in the Japanese market, “still considers the fall in these crypto treasury-related stocks to be the bursting of a bubble.”
However, he also explains that investors who are most confident in the long-term rise of Bitcoin may see Metaplanet’s discount as a buying opportunity. It’s a matter of perspective…
