Benchmark Maintains 'Buy' on Metaplanet Despite 50% Target Cut Amid Bitcoin Losses

Benchmark analyst Mark Palmer has cut his price target on Metaplanet to ¥1,100 from ¥2,400, citing the company's aggressive Bitcoin accumulation strategy and recent valuation losses. The firm maintains a 'Buy' rating, reflecting confidence in the company's long-term potential despite the lowered target price. Metaplanet's Bitcoin holdings have led to a $619 million net loss due to a non-cash valuation loss, as the current price remains significantly below its average acquisition cost. This has created a challenge for investors who are now closely watching how the company balances its Bitcoin strategy with operational growth.

The company reported a $665 million impairment loss on its Bitcoin holdings as the price dropped 46% from late-2025 highs. Despite this, Metaplanet's operational performance showed strong improvement in fiscal year 2025, with revenue from its hotel and consulting divisions rising 738% year-over-year. Operating profit also surged by 1,695% compared to the previous year, indicating solid growth in its non-crypto operations.

The Bitcoin-related business generated ¥8.47 billion in revenue and ¥7.19 billion in operating income, primarily from premium income on Bitcoin options trading. This suggests that Metaplanet is still deriving value from its crypto holdings, even as the market remains volatile. Analysts have noted that this segment could potentially fund dividends without requiring the company to sell its core Bitcoin holdings.

Why Did This Happen?

Metaplanet’s strategy of aggressively accumulating Bitcoin has resulted in a substantial unrealized loss of over $1.35 billion. This is due to the fact that the company's average acquisition cost is $107,716 per BTC, while the current trading price is $68,821. This strategy mirrors that of MicroStrategy, though Metaplanet's exposure is even more concentrated relative to its size. The company's Bitcoin stack has grown to 35,102 BTC, representing a roughly 1,892% increase from the previous year. This rapid accumulation has made the company's financial performance highly sensitive to Bitcoin's price movements.

The risk of capital-raising constraints has also been highlighted, especially if the crypto market downturn continues. The company has used convertible notes and equity offerings to finance its Bitcoin purchases, which exposes it to shareholder dilution risks. These factors have contributed to the recent cut in the price target by Benchmark, which now sees the valuation as more balanced given the current market conditions.

How Did Markets Respond?

Metaplanet’s share price has fallen 28.63% year-to-date, reflecting the growing sensitivity to Bitcoin’s price swings. This is in contrast to companies like MicroStrategy, which also faces over $5.33 billion in unrealized Bitcoin losses but continues to maintain its holdings despite the downturn. The market’s response underscores the challenges of maintaining a high-concentration crypto treasury in a volatile market.

Meanwhile, Bitcoin ETFs have shown signs of short-term rebound, with Fidelity’s FBTC and Grayscale’s Ethereum Mini Trust ETF recording significant inflows. On Feb. 13, U.S. spot Bitcoin ETFs attracted $15.20 million in net inflows, signaling a potential shift in institutional demand for crypto assets. This may indicate a broader market stabilization, though Metaplanet’s stock remains tied to Bitcoin’s price action.

What Are Analysts Watching Next?

Analysts remain divided on the long-term outlook for Metaplanet. While the company’s Bitcoin Income Generation business shows promise, the key challenge lies in managing the volatility and dilution risks. Benchmark’s Mark Palmer has emphasized that the company’s success in scaling its holdings and income-generating strategies will be critical to its future valuation. However, the firm also warned that Bitcoin's price volatility could continue to impact investor confidence.

The broader supply dynamics of Bitcoin are also being watched closely. The growth of Bitcoin’s 'ancient' supply—coins held for over 10 years—is now outpacing newly mined coins, creating potential scarcity-driven price scenarios. With institutional demand expected to reach $300 billion by 2026, this could further tighten the available supply and influence Bitcoin’s price trajectory.

For now, the market is waiting to see whether Metaplanet can successfully navigate its aggressive Bitcoin strategy while maintaining its operational momentum. The company’s ability to manage valuation swings and secure further funding without diluting shareholder value will be key factors in determining its future performance.