TL; DR
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A $16.5 million investment in Bitcoin as a treasury has added $24 billion to Metplanet’s total market value – a strategy that will deteriorate as more companies adopt it, but will still support the price of BTC over time.
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In high school we discovered a problem with getting infinite grades:
Take the necessary assessment work and make a video of it.
For example, Chevy and his friends passed their sociology group project on Vikings in 8th grade by filming themselves sword fighting with sticks and quoting lines from their textbooks.
It worked not because the work was good (it was comically bad), but because filming and piecing together footage in the mid-2000s took a lot more effort — enough that most teachers couldn’t bring themselves to not give them a passing grade. just for the perceived ingenuity.
But then along came the iPhones and they ruined everything by making recording/editing multimedia presentations much easier (thanks very much Steve Jobs).
We tell you this because there is a parallel in the crypto world right now.
A temporary tactic that boosts company valuations, but will quickly become less effective as it continues to be applied.
That is, companies that hold Bitcoin in their treasuries.
MicroStrategy ($MSTR) was the first to do this, buying up 1% of the world’s BTC between August 2020 and now – with its share price rising 14x over the same period.
(Because investors bought $MSTR stock as a roundabout way to buy Bitcoin while avoiding regulatory issues).
And now the same thing is happening with the Japanese company Metaplanet, because they have followed the same strategy.
In fact, their stock price only rose 20% after they announced they had purchased even more Bitcoin.
What’s even crazier is that their stock price has increased a whopping 9x since they adopted Bitcoin in April, with total government holdings of (a paltry) $16.5 million worth of BTC.
Here’s the math on that:
A $16.5 million investment in Bitcoin added $24 billion to Metplanet’s total market capitalization.
And while more and more companies embracing this strategy will result in the strategy’s returns declining over time, one factor will remain unchanged:
More adoption = more positive effects on the price of Bitcoin.
