Yesterday, October 28th, Metaplanet approved a share buyback program disclosing a credit facility of up to $500 million collateralized by Bitcoin (BTC). This capital allocation tool is most effective when stocks are trading below their market-to-book ratio, where gains are amplified on Bitcoin gains and losses are magnified on drawdowns.
In a filing with the Tokyo Stock Exchange, the company set a limit on share buybacks over the next year at 75 billion yen, or 150 million shares, and approved a “BTC-backed” credit facility held by the custodian.
For reference, Metaplanet holds 30,823 BTC and says share buybacks will be “most effective” when the stock is below 1x mNAV, which is market capitalization divided by net asset value.
Bitcoin treasury companies act as leveraged, flow-driven vehicles rather than simple agents for spot Bitcoin. So does the recent outperformance reflect a sustainable business model or a cycle of momentum that fades as Bitcoin stalls or mNAV premiums compress?
Leverage and share buybacks promote stock convexity
Using a Bitcoin-backed line of credit for stock repurchases increases your per-share Bitcoin exposure, typically pushing the stock’s mNAV back by more than 1x during share price appreciation.
In the exact structure, the debt remains fixed, so if Bitcoin falls or the mNAV premium is compressed, downside convexity increases. At the same time, the collateral assets fluctuate and the reduction in the number of shares increases the volatility per share.
The strategy implemented a convertible bond and market equity program over multiple cycles, significantly outperforming stocks during Bitcoin’s rise and significantly underperforming stocks during its drawdown.
Semler Scientific financed Treasury growth through ATM issuance and subsequent trading, exhibiting flow-driven behavior where stock returns diverge from spot Bitcoin returns during premium cycles and capital structure fluctuations.
Recent performance shows that dispersion. Over the past 30 days, Strategy stock has fallen about 13%, Metaplanet’s U.S.-listed shares have fallen about 10%, and Semler Scientific has risen about 7.5% following the deal announcement.
These movements were driven by mNAV fluctuations and equity flows, as well as Bitcoin’s relatively flat price movement.
This pattern fits a momentum model in which a stock’s performance depends not on Bitcoin price alone, but on premium expansion or contraction, the timing of issuances or buybacks, and the market’s appetite for leveraged Bitcoin exposure.
Institutional financial institutions typically require low starting loan-to-value ratios and maintenance triggers for Bitcoin-backed credit.
Strategy’s 2022 Silvergate loan includes approximately $820 million in Bitcoin collateral against $205 million in withdrawals, representing an LTV of approximately 25% and demonstrating overcollateralization standards that would force rapid deleveraging during a Bitcoin selloff.
Metaplanet’s filings do not disclose specific LTV terms or collateral triggers, leaving open questions about how much cushion the company maintains and whether drawdowns could trigger margin calls or forced asset sales.
Mechanism that amplifies the cycle
The calculation behind treasury stock convexity combines four multipliers: Bitcoin price change, Bitcoin’s share of net asset value, change in mNAV multiple, and inverse change in number of shares.
When a company borrows against Bitcoin to buy back stock, its net asset value becomes more sensitive to Bitcoin fluctuations because the collateral is variable but the debt is fixed.
At the same time, the number of shares decreases and Bitcoin exposure per share increases, often leading to mNAV reratings, which are then violently reversed during Bitcoin drawdowns when the market discounts leverage risks and potential margin calls.
Metaplanet’s filing explicitly acknowledges this move by targeting share buybacks if the stock price falls below 1x mNAV.
If Bitcoin remains flat and the stock trades between 0.95x and 1.00x mNAV, a buyback could end the discount and increase stock returns, even if spot Bitcoin is flat.
If Bitcoin goes up 20% and mNAV expands to 1.1x or 1.2x, the combination of leverage and share reduction will typically outperform stocks.
If Bitcoin falls 20% and lenders demand replenishment of collateral, stocks could underperform Bitcoin as mNAV falls and markets price in deleveraging risk.
This pattern defines momentum amplification rather than a stable Bitcoin correlation investment.
The use of proceeds, such as purchasing Bitcoin, repurchasing it, or funding the company’s Bitcoin revenue operations, provides additional discretionary power.
Issuing stock to buy Bitcoin in good times and buying back stock in bad times creates per-share growth in Bitcoin over time, but leaves companies exposed to cycle risk when premium and discount regimes reverse.
Financial companies that effectively implement this strategy have the potential to increase their per-share Bitcoin exposure. Mistiming your issuance or facing forced deleveraging during a drawdown will destroy the value compared to holding Bitcoin directly.
Regulation and governance background
Under Article 165 of the Companies Act, Japan’s corporate law allows the board of directors to approve share buybacks if the powers cited by Metaplanet in its disclosure are provided in the company’s articles of incorporation.
While the share buyback program itself did not require a shareholder vote, significant capital structure changes were made to shareholders during 2025, including an amendment to the articles of incorporation and a significant stock offering.
Reports of Metaplanet’s recent shareholder meeting indicate that investors approved a significant capital raise earlier this year to fund its Bitcoin strategy.
Listing rule frameworks vary by market. The UK Financial Conduct Authority’s July 2024 review removed most shareholder voting requirements for material transactions and moved to a disclosure model, reducing friction on large capital movements.
Hong Kong still requires shareholder approval and the circulation of very substantial acquisitions under Chapter 14 of the Listing Rules, maintaining process-oriented governance for companies focused on financial strategy.
There are no new universal regulations forcing a vote on the Bitcoin Treasury transition. Instead, normal listing and corporate rules apply, with varying levels of shareholder gates depending on the jurisdiction.
Testing the momentum hypothesis
Treasuries act as momentum amplifiers when their returns depend more on the mNAV premium cycle and capital flows than on the spot price of Bitcoin.
Evidence supporting that distinction includes the disparity in performance among Strategy, Metaplanet, and Semler Scientific despite similar Bitcoin exposure. The company’s clear strategy to issue in times of strength and buy back in times of weakness, as well as structural leverage that magnifies both upside and downside relative to Bitcoin.
The alternative view, in which treasury stock is a durable business model with sustained outperformance, requires proof that Bitcoin per share growth and operating cash flow justify a persistent mNAV premium of greater than 1x.
To date, most treasury companies trade at various premiums or discounts based on market sentiment, Bitcoin momentum, and capital structure announcements rather than underlying cash flow generation.
Strategy’s software business does not contribute much to its revenue compared to its Bitcoin holdings. Metaplanet’s operational business remains small compared to its finances. Semler Scientific has medical device revenues, but its stock story is built around its exposure to Bitcoin.
| ticker | 30D return | Note (mNAV context) |
|---|---|---|
| IBIT (BTC proxy) | +5.27% | NAV baseline. Use as BTC reference. |
| MSTR | -8.6% to -7.3%* | Stock premium/issuance flow fluctuates in mNAV vs. BTC. |
| SMLR | -27.4% to -24.2%* | Treasury and trade headlines drove premiums significantly. |
| Metaplanet (OTC: MTPLF) | −9.77% | This month BTC → under implicit mNAV compression. |
Key variables to track include facility drawdowns and their timing, disclosed collateral terms and LTV triggers, and the company’s mNAV compared to 1x over time.
Assume that Metaplanet withdraws the entire $500 million for stock buybacks during a period when the stock is trading below 1x mNAV and Bitcoin is either flat or rising.
In that case, this strategy can outperform stocks by exiting the discount and increasing Bitcoin per share. If the company were to tie during a Bitcoin rally where mNAV is already above 1x, upside exposure would be amplified, but downside risk would also be amplified if Bitcoin subsequently corrected and lenders tightened collateral requirements.
Historical precedent suggests that Bitcoin-backed credit poses the risk of margin calls in the event of rapid drawdowns.
Lenders typically require conservative LTVs and overcollateralization. This means that companies must maintain overcollateralization or face forced deleveraging, which is a hallmark of momentum amplification rather than defensive treasury.
Metaplanet’s filing notes that the proceeds could fund stock buybacks, additional Bitcoin purchases, or the company’s Bitcoin revenue operations, but does not specify collateral management protocols or LTV maintenance terms.
What defines durability and circulation models?
If Bitcoin falls, the mNAV premium compresses, and the debt LTV constraint tightens at the same time, treasury stock loses its function as a momentum vehicle, forcing equities to underperform spot Bitcoin.
Even if Bitcoin is flat, the same stock could generate positive returns if the mNAV discount approaches 1x due to buybacks.
While premiums are expanding and Bitcoin is rising, stocks typically outperform through leverage, share reductions, and multiple expansions. The moment flywheel rotates at full speed.
Corporate Bitcoin financing currently includes convertible debt, Bitcoin-backed credit, ATM equity programs, preferred stock, and warrants.
The long-term differentiator is capital cost and collateral requirements, rather than headline Bitcoin exposure.
Companies that take advantage of low-cost financing and maintain conservative LTVs can weather drawdowns without forced sales. Companies operating with tight LTV margins or high borrowing costs face greater cycle risk.
The evolution of listing rules is also important. The UK reforms could reduce voting friction on large deals and enable more active circulation of capital.
Hong Kong’s continued requirement for shareholder approval for major moves provides a gating mechanism that could dampen the momentum cycle.
As additional treasury companies list or relist in jurisdictions with lighter governance requirements, structural checks may be reduced and flow-driven strategies may become more prominent.
Metaplanet’s Oct. 28 disclosure positions the company as implementing a mature financial strategy, using Bitcoin as collateral to manage stock valuation through share buybacks, while maintaining flexibility to deploy capital for purchases, repurchases, or across operations.
The effectiveness of that strategy will depend on execution timing, collateral management, and whether mNAV premiums persist or decline.
The one-year authorization period, which ends on October 28, 2026, will test whether Bitcoin Treasuries qualify as a new asset class with durable premium trading or momentum trading that fades as the underlying cycle changes.
(Tag translation) Bitcoin
