Bitrabo Editorial
Recently, Japanese investment firm Metaplanet Inc. announced a significant increase in its Bitcoin assets, reaching a total of 530.717 BTC as of October 3.
The company attributed this growth to a strategy involving smart options trading, which allowed them to acquire additional Bitcoin for their portfolio.
Details of the Options Strategy
Metaplanet revealed that they gained approximately 23.972 BTC, worth about $1.40 million at today’s rates, through the sale of Bitcoin put options and the collection of premiums.
The firm entered into a BTC options contract with QCP Capital, where they sold 223 Bitcoin put options with a strike price of $62,000 each. They explained:
By selling these put options, the company can ramp up its Bitcoin holdings if the market price drops under the strike price of $62,000 at maturity.
The maturity for these options is scheduled for December 27, 2024. Importantly, Metaplanet’s approach to using put options not only increases their BTC holdings but also bolsters their financial position, aligning with their strategy for sustained asset growth. The announcement noted:
This tactic enhances the company’s Bitcoin reserves and strengthens our balance sheet, aligning with our commitment to boosting long-term Bitcoin exposure and improving our financial standing to support profitability.
For the options trading, the company utilized margin collateral amounting to around $13.8 million, which was raised through the sale of stock acquisition rights. This collateral guarantees that their existing Bitcoin holdings remain safe and are not impacted by this strategy.
Motivation for the Options Trade
Simon Gerovich, CEO of Metaplanet, discussed the options strategy on X, highlighting how selling put options allows the company to take advantage of BTC’s volatility to earn premiums, thus increasing their Bitcoin without solely relying on market purchases.
— Simon Gerovich (@gerovich) October 3, 2024
Gerovich emphasized that this method not only increases their Bitcoin reserves but also creates an “additional income stream.” He noted that the combination of holding Bitcoin directly and using yield-generating tools like options leads to profit generation, aligning with the company’s aim to gradually acquire more Bitcoin.
The Metaplanet CEO reiterated the company’s commitment to enhancing its long-term Bitcoin holdings and expressed their strategy of diversifying BTC accumulation by employing both direct purchases and yield-generating strategies such as options trading.
Image created using DALL-E, chart sourced from TradingView.