From Japanese Hotels to "Asia Microstrategy," Stock Gainer Metaplanet CEO Shares Insights on Bitcoin Strategy

Deep Tide TechFlow
2025-07-04 09:22:37
Collection
"You must tell all your friends and family, as well as those you care about, that now is the time to buy Bitcoin."

Compilation: Deep Tide TechFlow

Guest: Simon Gerovich, Metaplanet CEO

Hosts: Bonnie & David Lin

Podcast Source: Bonnie Blockchain

Highlights Summary

You must tell all your friends and family, as well as those you care about, that now is the time to buy Bitcoin.

Bitcoin is an unparalleled quality monetary asset; no other asset on the market can compare to it.

Bitcoin is a superior version of gold and can be referred to as "digital gold." Due to Bitcoin's scarcity and decentralization, it should be an important option for every CFO in financial planning, and asset allocation should not consist solely of cash.

Bitcoin treasury companies provide an indirect investment avenue for investors who find it difficult to access Bitcoin directly. The innovation of Bitcoin treasury companies represents a disruptive change. This trend is like a black hole of capital, attracting a significant amount of funds through Bitcoin treasury companies into Bitcoin.

If you want to invest in Bitcoin treasury companies, you must ensure that these companies are fully committed, not only not selling Bitcoin but also making every effort to continuously increase their Bitcoin reserves.

If you ask us whether we will sell Bitcoin, my answer is absolutely not.

Companies that are execution-oriented, focused, and disciplined will gain higher market recognition, while those lacking these qualities will be eliminated.

Bitcoin is a unique asset with limited supply and increasing demand. As more people pay attention to Bitcoin, its price may continue to rise over time.

We are still in the first phase of the Bitcoin journey, which can be called the "gold rush." In this phase, our goal is to accumulate as much Bitcoin as possible. In the second phase, when Bitcoin's price rises significantly, stock prices will truly reflect the actual value of many listed companies.

In the current situation, Bitcoin is not an ideal form of currency. But it does not need to become a currency because it is an excellent store of value.

One highlight of Bitcoin reserve companies is that there is no need for true innovation; your core business is to buy Bitcoin, and the innovation lies in how you raise funds.

I believe that multiple "Bitcoin superpowers" will emerge in the future. While the United States may currently be the largest Bitcoin superpower, we hope to help Japan become such a country through Metaplanet.

Bitcoin Asset Companies and Premiums

David:

Today we have invited Simon Gerovich, the president of Metaplanet, to discuss the future development of Bitcoin asset holding and the potential applications of Bitcoin in the hotel industry.

Bonnie:

The latest news is that Metaplanet's Bitcoin premium has reached nearly $600 per coin, with some articles saying this price is too high. What do you think? Is the MNAV metric a good indicator for evaluating Bitcoin asset companies?

Simon:

Recently, many key performance indicators have indeed been proposed to evaluate Bitcoin asset companies. Among them, I believe "Bitcoin yield" is the most important metric, reflecting the amount of Bitcoin held per share and the growth rate. This metric has become a common tool for sell-side analysts, and Bitcoin asset companies worldwide are adopting similar evaluation methods. Therefore, when evaluating a company, one should not rely solely on a single metric but consider multiple factors comprehensively.

MNAV (Market Net Asset Value) is an important reference indicator. It is calculated by adding the company's market value to the enterprise value of its debt and then dividing by the amount of Bitcoin held by the company. This metric fluctuates with market interest in the company's stock and the activities the company is engaged in. I believe Metaplanet's premium is justified. For example, for investors wishing to hold Bitcoin directly, the tax policies differ greatly across countries. In Japan, for instance, ordinary investors face personal income tax rates as high as 55% when purchasing Bitcoin directly. However, by buying shares of a publicly listed company like Metaplanet, investors can hold Bitcoin indirectly in a more tax-friendly manner.

This has also driven our flywheel effect. The reasonableness of MNAV depends on various factors, the most critical being the company's ability to increase the "per share Bitcoin" amount. We are currently one of the fastest-growing companies in this field globally, especially in terms of increasing per share Bitcoin. We aim to keep MNAV between 3 and 5, so as not to depress stock prices through excessive issuance while effectively increasing the value of per share Bitcoin, thereby creating greater benefits for all shareholders.

Dilemma Situation

Bonnie:

Based on your earlier points, I thought of a dilemma. There are some companies with ample cash flow and healthy operations; there are also some companies struggling and in distress. These distressed companies may choose to transform into Bitcoin treasury companies because the risks are low, yet they could potentially gain huge rewards. If these companies see their stock prices soar, even surpassing those of companies that were originally performing well, how do you think this situation will develop?

Simon:

I find it interesting that Bitcoin treasury companies provide an indirect investment avenue for investors who find it difficult to access Bitcoin directly. After all, almost everyone has a securities account, and buying stocks is a familiar process for them. But if you want people to open exchange accounts, it requires extra steps. Moreover, considering past incidents where some cryptocurrency exchanges were hacked, many people may be deterred from Bitcoin and cryptocurrencies. Additionally, some traditional investors' funds do not allow direct purchases of Bitcoin, but they can buy shares of publicly listed companies. Therefore, I believe the innovation of Bitcoin treasury companies represents a disruptive change. This trend is like a black hole of capital, attracting a significant amount of funds through Bitcoin treasury companies into Bitcoin.

Of course, caution is needed when choosing Bitcoin treasury companies. The company's historical performance will become increasingly important. For example, we have a 14-month long-term performance record, while Microstrategy has a 5-year record. Furthermore, the CEO's attitude is crucial; do they truly believe in Bitcoin? Will they sell the Bitcoin they hold?

This reminds me of a conference I attended in Tokyo a few weeks ago, which focused on Japanese stocks. Someone asked me what I would invest in besides Bitcoin. I made a very disgusted expression, and many people captured that moment and shared it on social media. But I want to emphasize that Metaplanet will only invest in Bitcoin and will never invest in other assets, let alone sell our Bitcoin. Michael Saylor has consistently conveyed the same message. So, I believe that if you want to invest in Bitcoin treasury companies, you must ensure that these companies are fully committed, not only not selling Bitcoin but also making every effort to continuously increase Bitcoin reserves.

Transformation of Metaplanet's Funding Structure

David:

Simon, can you talk to us about the initial phase of the company's transformation? You mentioned that the company was initially a struggling hotel business, which sounds interesting. How did you initially raise funds to purchase Bitcoin? How has your fundraising method evolved over the years?

Simon:

At that time, we had a series of hotels, and during our initial discussions about transforming into a Bitcoin asset company, we decided to raise startup funds by selling some hotels. Additionally, we received funding support from like-minded investors, some of whom are here at this conference today. For example, UTXO Management, a sponsor of this Bitcoin conference, became one of our early shareholders. At the same time, we also had a very excellent board of directors, many of whom participated in our private fundraising.

At the beginning of last year, we completed our first round of Bitcoin purchases with the funds raised, followed by a rights offering. A rights offering refers to a company providing existing shareholders the opportunity to purchase new shares. Traditionally, rights offerings are often viewed as a negative signal because they usually occur only when a company urgently needs funds.

But looking back, this was actually the smartest choice we made at that time. We had about 13,000 to 14,000 shareholders who filled out a lot of paperwork to provide us with the funds to purchase Bitcoin. This also established an initial connection between our Japanese shareholders and the company, as their funds were directly used to purchase Bitcoin. If you buy stocks in the market now, you are essentially buying shares from other sellers; but when you subscribe to new shares, that money flows directly into the company, and you feel that this funding is specifically used to help the company purchase Bitcoin. That was our operational approach at that time.

This happened last summer when we raised about $60 million to $70 million. By the end of the year, we launched our first "Mobile Warrant." This warrant is a financing mechanism similar to the "At-the-Market Stock Offering" in the U.S. In the U.S., companies can directly sell new shares to the market, like Microstrategy does; but in Japan, this method is not feasible. So we designed the structure of the Mobile Warrant, issuing it to partners, who then sell shares in the market and use the proceeds to exercise the warrants, ultimately obtaining newly issued shares. The effect of this mechanism is similar to the "At-the-Market Stock Offering" in the U.S.

Through this method, we successfully raised a significant amount of funds. We completed our first issuance in December last year, and the most recent one started in February this year and just completed exercise last week. We also officially announced that we raised about $600 million in equity through this operation. As the company scales, we can issue more shares to purchase more Bitcoin. We plan to continue using a similar "At-the-Market" operational model.

Looking ahead, we may issue convertible bonds or preferred shares, but for now, we are still focused on the equity financing phase. This financing method is the most effective because it is permanent capital that does not need to be repaid and can be fully used to purchase Bitcoin.

A Group of Copycat Bitcoin Companies?

Bonnie:

Returning to the topic you just mentioned. Clearly, Michael Saylor, like you, is a staunch supporter of Bitcoin, and Bitcoin treasury companies (companies that include Bitcoin on their balance sheets) have also received a lot of support from the Bitcoin community. Nowadays, many people want to imitate your successful model after seeing your success. But you were one of the best-performing stocks globally last year, right? This makes it seem like your model is a kind of "success recipe." However, many people enter this field with the wrong mindset, yet claim to be Bitcoin companies. What do you think about this?

Simon:

Overall, it is a good thing that more companies are adopting the Bitcoin standard. I believe this applies not only to companies like ours that were once struggling but also to successful companies with a lot of idle cash.

Of course, there will always be some bad actors who see this as a shortcut to quick riches. They might think, "If Bitcoin can boost my stock price, why not do it?" But I believe investors are rational. As more Bitcoin treasury companies emerge, investors will find it easier to compare these companies, for example, by monitoring their BTC yield (the investment return from Bitcoin) and the amount of Bitcoin held per share through some platforms. Ultimately, companies that are execution-oriented, focused, and disciplined will gain higher market recognition, while those lacking these qualities will be eliminated.

Recently, I saw a company announce the sale of Bitcoin, and I thought that was a bit foolish. They had just announced the purchase of Bitcoin a few months ago, and now they were selling it to realize some profits in the last quarter. This behavior severely damages their credibility because investors will no longer see them as a stable Bitcoin investment channel. So, I believe that over time, the performance of different companies will gradually diverge, and investors will become clearer about which companies they support and why.

However, I also understand that the motivations for different companies to include Bitcoin on their balance sheets may vary. There are many complex factors to consider.

We Will Always Continue to Buy Bitcoin

David:

Is there a price that would make you stop buying Bitcoin, or at least slow down your purchases? If Bitcoin rises to $500,000 next week, would you still continue to buy? Even if its price has quintupled in a week?

Simon:

I love your hypothesis. If Bitcoin rises to $1 trillion tomorrow, we might think it is overvalued and need to reassess, but our plan is to continue buying Bitcoin forever. However, for now, Bitcoin's price is again close to its historical highs. Bitcoin is a unique asset with limited supply and increasing demand. As more people pay attention to Bitcoin, its price may continue to rise over time.

If you ask us whether we will sell Bitcoin, my answer is absolutely not. We want our shareholders to freely decide when to buy or sell our stock. Our goal is to be the best leveraged proxy for Bitcoin, and our most important task is to remain focused and disciplined, executing strictly according to plan. Regardless of how the market changes, we will not change our stance or make decisions that confuse investors.

Growth Phases of Bitcoin Asset Companies

Bonnie:

Michael mentioned that MSTR's leverage effect is equivalent to 1.5 times Bitcoin. Many investors believe that when Bitcoin reaches its historical peak, MSTR or other Bitcoin treasury companies' stock prices should also reach their historical peaks. Why is this not the case in reality?

Simon:

I think it is important to look at the problem from a long-term perspective. Strategically, a company's current situation may be similar to what it was four or five months ago, but the biggest change is that the amount of Bitcoin they hold per share has significantly increased. Although the stock price may not fully reflect this, the company's actual value has clearly improved.

Bonnie:

That's right, but I want to say that many people do not truly understand Bitcoin. So how should they view Bitcoin? If you were to explain it to my grandmother, who is in her seventies or eighties, how would you do it?

Simon:

If your grandmother is in her seventies or eighties, I might not suggest that she hold Bitcoin herself, but she could consider long-term investments for her descendants. We are still in the first phase of the Bitcoin journey, which can be called the "gold rush." In this phase, our goal is to accumulate as much Bitcoin as possible. The total amount of Bitcoin in the entire network is only 21 million, and our company currently holds more Bitcoin than any other publicly listed company, and almost no one can catch up. We hope to be a leader in the industry. In the second phase, when Bitcoin's price rises significantly, stock prices will truly reflect the actual value of many listed companies. In this process, the supply-demand mechanism, Bitcoin's price volatility, stock volatility, and the company's financing execution ability will all have a significant impact on the outcome.

In this first phase, people need to understand that stock prices do not always reflect the intrinsic value of the company. Just like in the early days of Amazon, even though revenues were growing, the stock price performed poorly due to thin profits. At that time, Amazon reinvested most of its earnings into advertising, marketing, and network expansion. Therefore, I believe that any investor in Bitcoin treasury companies should not have short-term profit goals. Similarly, if you invest in Bitcoin, you should not aim for short-term gains. But from a medium- to long-term perspective, Bitcoin treasury companies have the ability to bring higher returns by increasing the number of Bitcoin held per share. By purchasing stocks of Bitcoin treasury companies, you can let the company handle the heavy lifting, such as Bitcoin reserves and management. Years later, when you look back, you will find that your Bitcoin investment exposure has significantly increased.

Explosive Growth Phase of Bitcoin Asset Companies

Bonnie:

You mentioned earlier that we are currently in the first phase, right? This is a gold rush phase similar to the Wild West, and we need to wait for the arrival of the second phase. So when do you think the second phase will arrive?

Simon:

The second phase may arrive in three to five years, or even five to seven years. By then, Bitcoin will be widely adopted globally, and its price may break through $1 million, or even reach $5 million. At that time, banks will have the ability to custody Bitcoin. If you have your own treasury, stock portfolio, or even real estate, you can deposit these assets in a bank and obtain loans against them. Currently, such functionality has not been realized in the Bitcoin space. Although some banks have announced plans to offer Bitcoin custody services, it will take time for them to be implemented and provide more attractive interest rates for Bitcoin.

In the second phase, Bitcoin will become an important component of quality balance sheets. I hope that by then, our balance sheet will hold trillions of dollars worth of Bitcoin. These Bitcoins can be deposited in major banks to obtain loans at low interest rates, and then use this funding to acquire companies focused on the Bitcoin ecosystem. For example, applying for a digital banking license or acquiring local banks to provide customers with Bitcoin-related financial services. The second phase will be full of infinite possibilities because having Bitcoin as a quality balance sheet will open up new avenues for business development.

Game Theory Between Nations

Bonnie:

A few days ago, when I was talking to a head of an Asian exchange, he mentioned a viewpoint: Since almost all transactions are currently denominated in US dollar stablecoins, the US may have already gained an advantage in the Bitcoin space. Does this mean that other countries have fallen too far behind to catch up?

Simon:

I believe that the popularization of Bitcoin takes time. Moreover, the US strategy in the Bitcoin space may be more thoughtful than we imagine. I believe the US is actually buying Bitcoin behind the scenes, just not publicly. If they announced every purchase, it would push up the price of Bitcoin, making it impossible for them to continue buying at lower prices. However, many countries are publicly disclosing their Bitcoin purchases. For example, El Salvador and Bhutan are typical cases of publicly buying Bitcoin. I have also learned that some countries in the Middle East are announcing their Bitcoin holdings in different ways. Therefore, I believe multiple "Bitcoin superpowers" will emerge in the future. While the US may currently be the largest Bitcoin superpower, I believe other countries also have the opportunity to occupy important positions in this field.

We hope to help Japan become such a country through Metaplanet. Currently, Metaplanet is the largest Bitcoin holding company in Japan and even Asia. We hope to encourage Japan to follow in the footsteps of the US in the Bitcoin space through our efforts. Therefore, even if you feel that the current pace of Bitcoin adoption is slow, there is no need to feel disappointed. All of this takes time, and this also means we have more opportunities to purchase before Bitcoin prices rise to levels that ordinary people find hard to bear.

You must tell all your friends and family, as well as those you care about, that now is the time to buy Bitcoin.

Unique Bitcoin Demand in the Japanese Market

Bonnie:

I remember you mentioned in an interview that if investors in the Japanese market want to get involved in Bitcoin assets, they basically need to go through your company, is that correct?

Simon:

Actually, there are multiple options in the market. Investors can buy Bitcoin directly through local exchanges, but doing so comes with a high tax burden. Therefore, when investors wish to invest in Bitcoin in a more tax-friendly manner and gain returns beyond Bitcoin itself, they often choose us. The returns from directly purchasing Bitcoin depend entirely on the price fluctuations of Bitcoin; whereas if investing through a Bitcoin ETF in the US, due to the correlation between the ETF and Bitcoin prices, investors' returns typically do not exceed Bitcoin's performance itself. In contrast, the advantage of Bitcoin treasury companies is that we are an operating company that can flexibly utilize various tools in the capital market, such as issuing stocks, convertible bonds, or preferred shares, to effectively enhance the value of per share Bitcoin.

Bonnie:

The three metrics you mentioned—per share Bitcoin, BTC yield, and BTC gain—what are the differences between them?

Simon:

"BTC yield" refers to the growth rate of the number of Bitcoin held per share over different periods. This year, our BTC yield is about 190%, meaning we successfully increased the number of Bitcoin held per share by 190%.

"BTC gain" translates the BTC yield into specific Bitcoin quantities. The calculation method is to multiply the Bitcoin holdings at the end of the previous period by the BTC yield. For our company, this year we added about 3,500 Bitcoins through Bitcoin operations (considering dilution factors). Then, multiplying these 3,500 Bitcoins by the current Bitcoin price gives us the "BTC dollar gain."

This metric is mainly to help the traditional financial market understand the actual value we create behind the scenes. This year, our BTC dollar gain is about $400 million. I prefer to view it as a reflection of profit, although it is not true accounting profit, it does showcase potential value creation. If annualized, our BTC dollar gain could reach $1 billion. So, what should the valuation be for a company that can create $1 billion in value for shareholders each year?

The current challenge is that traditional financial markets have limited tools for evaluating companies. They can only use traditional frameworks to measure, such as revenue and profit. However, Bitcoin treasury companies are different from traditional operating companies. We do not have significant revenue, nor do we have traditional profits. Therefore, other evaluation tools need to be adopted, such as BTC yield, BTC gain, and BTC dollar gain, which can help analysts better understand the value we create.

Becoming the Bitcoin Company Metaplanet

David:

Before we explore your philosophy on Bitcoin, I want to understand your view on Metaplanet. Your company is often compared to Microstrategy, and some even call you "the Microstrategy of Asia." What do you think about this?

Simon:

I feel very honored to be compared in this way. Michael Saylor has had a profound impact on me. I often mention that during the pandemic, when my hotel business was in dire straits, I found some solace by listening to Michael Saylor's podcasts. He shared his vision of how publicly listed companies can transform and embrace Bitcoin, which was almost unimaginable at that time.

This inspired me and solidified my determination to transform from a struggling hotel business. Therefore, over the past year, making Bitcoin our core financial asset has completely changed our situation.

David:

Did investors show resistance when you pushed for this transformation? Especially considering Bitcoin is a brand new asset class unrelated to the core business, how did you address these objections?

Simon:

You could say it was a blessing in disguise. Because our operational situation was not ideal at the time, we had little choice but to seek transformation. The board and shareholders told me, "Simon, think of a way; any method that can save the company can be tried." Therefore, I did not encounter much opposition in the board meeting.

However, this reminds me of a few years ago when the company was performing well, I proposed to the board to accept Bitcoin payments in our hotels. At that time, it seemed like a very natural next step, but I was laughed at by the board.

They asked me why we would take the risk of using such an unpopular Bitcoin for our business. So, I had to abandon that idea. But I kept thinking about whether there would be an opportunity to integrate Bitcoin into our core business in the future. Eventually, we achieved this at the right time.

Local Currency and Bitcoin

David:

How much does the performance of local currency affect your new Bitcoin acquisition strategy? For example, the Japanese yen has been continuously depreciating against the dollar and other currency baskets over the past 15 to 20 years. Would you have made this transformation if this situation had not occurred?

Simon:

Absolutely. I believe Bitcoin is an unparalleled quality monetary asset; no other asset on the market can compare to it. If you are in a market with currency depreciation, like the US, you will find many people discussing the excessive printing of dollars and the country's massive debt burden.

Japan's situation is similar. Many G7 countries face similar issues. Japan is the most indebted country in the world when calculated as a percentage of GDP, and this situation is very pronounced. The purchasing power of the yen has significantly decreased. In the past, many Japanese people could proudly vacation in Hawaii, but now they find it difficult to do so due to the depreciation of the yen. However, I believe this is not just a problem of the yen or the dollar, but a problem with the entire fiat currency system. Governments can print these currencies at will, which means that the wealth you earn through hard work may be diluted due to the arbitrary printing of money. Therefore, fiat currency is not an ideal choice for long-term wealth storage.

Bitcoin and Deflation?

David:

We all know that Bitcoin is considered a hedge against inflation. But what about in a deflationary environment? For example, Japan experienced deflation in the early 1990s and afterward. If, in such an environment, the purchasing power of cash increases over time, what theoretical value and demand does an asset like Bitcoin have?

Simon:

That's a very deep question. However, I believe the price has already started to rebound. Japan once experienced a massive asset bubble, primarily driven by post-war economic reconstruction. I remember when I lived in Japan in the 1980s, people even wrote books claiming Japan was "number one in the world." I hope that one day Japan can reach such heights again. But at that time, it did indeed slide from an absolute peak, and now inflation has re-emerged.

If you are in an environment where the value of currency rises over time, which is deflation, the reasons for purchasing Bitcoin may seem less obvious. But Bitcoin has a key characteristic: its total supply is fixed at 21 million. Even appreciating currencies cannot directly compare to this characteristic of Bitcoin. Therefore, the value of Bitcoin does not depend on any single currency system; it can exist independently. Compared to the phenomenon of massive currency printing and inflation globally, Bitcoin is undoubtedly the best store of value currently.

Why Don't People Just Buy Bitcoin Directly?

Bonnie:

With so much Bitcoin, how do you ensure the security of these assets?

Simon:

One significant advantage of Bitcoin treasury companies is that they help users overcome many technical barriers to holding Bitcoin. As we mentioned earlier, losing a private key means permanently losing Bitcoin, which is not as simple as recovering a bank password over the phone. Once Bitcoin is lost, it cannot be recovered. Therefore, if you choose to invest in a Bitcoin treasury company or invest in Bitcoin through an ETF, you can sleep soundly because your Bitcoin assets will be well protected.

In fact, many Bitcoin holders do not inform their spouses or children about their private key information. If an accident occurs, these Bitcoins may disappear forever.

As a company, we place great importance on transparency. We publish all Bitcoin public addresses on our dashboard. This practice is crucial for us to gain the trust of investors and Japanese shareholders. Additionally, as required by law, we must custody Bitcoin with third-party custodians approved by regulatory agencies. Therefore, we strictly adhere to this requirement. As our Bitcoin holdings increase, we will introduce more professional custodians to ensure the security of the assets. We always choose the best custodians and diversify our assets across multiple institutions to reduce risk.

Bitcoin Asset Companies Never Sell?

Bonnie:

If a company that claims to be a Bitcoin reserve company engages in low buy high sell trading and is very skilled at it, what impact would this behavior have on the entire system? We strongly agree with Michael Saylor's long-term holding strategy for Bitcoin, but if I choose to sell my Bitcoin, what consequences would there be besides disappointing investors?

Simon:

Then you are not a true Bitcoin reserve company. I believe that companies engaged in Bitcoin trading are more like Bitcoin hedge funds. The primary purpose of Bitcoin hedge funds is to profit from various trading strategies in the Bitcoin market, and there are indeed many investment tools available to help you achieve this.

I know of some tools that focus on using Bitcoin-related trading strategies to generate returns, but this is completely different from the philosophy of Bitcoin reserve companies. We need to increase the number of Bitcoin held per share over time, which requires continuously accumulating Bitcoin, not selling it.

Would You Be Willing to Pay with Bitcoin?

David:

Why don't hotels accept Bitcoin for room payments now? Will this situation change in the future?

Simon:

This reminds me of the story of Bitcoin pizza. Early on, someone bought two pizzas for 10,000 Bitcoins, and later the price of Bitcoin soared to a million dollars. If you paid for a night's stay with Bitcoin, and Bitcoin rose to $1 million, that would become a very expensive room for one night.

David:

That's hindsight, but you can't predict Bitcoin's price tomorrow. Is this why Bitcoin is not yet widely used as a payment tool? Because everyone believes its value will continue to rise.

Bonnie:

Indeed. People may be more inclined to spend weaker currencies.

David:

Do you think there will come a day when not only Bitcoin but also stablecoins will be widely used for hotel payments or other blockchain-based transaction scenarios?

Simon:

Blockchain is essentially just a ledger, and there are many types of ledgers on the market. In Japan, people are already very accustomed to using electronic money. You can complete payments at hotels with a simple touch of your phone. In the US, Apple Pay is already very popular. For consumers, transaction speed is the most important. In the early days of buying coffee with Bitcoin, it took 15 minutes to complete transaction confirmation. In the current situation, Bitcoin is not an ideal form of currency. But it does not need to become a currency because it is an excellent store of value. In the future, there may be some applications based on Bitcoin that make micro-payments a reality.

However, for a hotel company or other businesses, accepting Bitcoin payments is a smart choice. This can gradually increase the amount of Bitcoin you hold and use it as an asset reserve. But the reality is that most companies need to use their income to pay for daily expenses. If you are a hotel company, profits are usually very thin, which means you may not be able to retain Bitcoin income long-term and may have to sell it to cover operating costs. However, I believe that more and more companies will choose to accept Bitcoin as a payment method in the future. In the Middle East, many people are already using Bitcoin to purchase cars and apartments. Sellers are willing to accept it because they see Bitcoin as an asset with long-term appreciation potential.

The Story of Metaplanet

Bonnie:

Michael Saylor once talked about how he started investing in Bitcoin, mentioning that during the pandemic, the company needed to compete with large enterprises like Microsoft. What is your story?

Simon:

To be honest, my story is not that complicated. At that time, we were under immense pressure. Our hotels were forced to close, and in three of our four markets in Southeast Asia and Japan, hotels were required to suspend operations. Revenue dropped to zero, but expenses continued. We were in a survival crisis and had to think about how to get through it. Our auditors added a "going concern warning" in the financial report, essentially alerting us that our cash was insufficient to sustain the company's operations for the next 12 months. That time was really tough.

Inspired by Michael Saylor, I shared some of his insights at a board meeting, and the response was very positive. So we decided to hold a shareholder meeting to propose investing in Bitcoin as a core financial asset. When we announced this plan, the market reacted positively, which further solidified our direction. Now, our Bitcoin strategy has been implemented for 13 or 14 months, and I am very excited about future developments, while also willing to face higher expectations and challenges.

Bonnie:

How did this story develop? Had you already started purchasing Bitcoin before this, or did you learn about it through YouTube? First, you must believe in Bitcoin and this strategy to continue, right? So where did your story come from?

Simon:

I actually started buying Bitcoin at the end of 2012 to early 2013. At that time, I was living in Japan and using Mt. Gox, which was the platform where many early Bitcoin buyers first encountered Bitcoin. You could say I have been a long-term enthusiast of Bitcoin. This interest also helped me when I was running the hotel business. Whenever the hotel business faced difficulties that made me feel frustrated, I would think of Bitcoin and regain my spirits. Over the years, I have been looking for opportunities to combine my interests with business, and the crisis during the pandemic provided me with such an opportunity.

Bitcoin is a Moral Responsibility

David:

I remember you once said that Bitcoin is a moral responsibility. What does that mean?

Simon:

I might have said it is a moral obligation. I believe that I and others in the industry have a responsibility to help more people understand Bitcoin. In Japan, it is currently not easy to access Bitcoin. Private trading to obtain Bitcoin is not common, and exposure is low. Moreover, the process of opening an account is very complicated. Since the Mt. Gox incident, Japan has strengthened regulations on digital assets, which, while necessary, has also led to many traditional regulatory rules still being in place, increasing the entry barrier. Therefore, we hope to provide Japanese investors with a simpler, tax-friendly way to purchase Bitcoin.

Additionally, we have obtained the publishing license for Bitcoin Magazine in Japan. In March of this year, we released the first issue, and the next issue will be published at the end of June. We hope to guide the Japanese people to better understand Bitcoin through this magazine. We believe we have a responsibility to educate people and enhance their financial knowledge. Therefore, the goal of Bitcoin Magazine is not to make a profit but to serve as a platform for spreading the Bitcoin story.

Moreover, we have retained a hotel and renamed it the "Bitcoin Hotel." This is an opportunity for people to encounter Bitcoin in real life. People can come here to experience hotel services, visit the Bitcoin art museum, and we plan to collaborate with Bitcoin artists worldwide to showcase their creations. Additionally, we will set up a Bitcoin museum to introduce the history and development of Bitcoin. The hotel lobby may also feature a wax statue of Satoshi Nakamoto for people to take photos with. Of course, we would be very happy if you could visit when the hotel opens at the end of next year.

Metaplanet's Future Strategy

David:

Speaking of hotels, besides the function of providing accommodation and rest, Simon, what are Metaplanet's plans next? You have successfully turned the company's situation around through effective strategies; do you currently have new strategic developments? Are there any expansion plans? Now that there is only one hotel left, will you consider purchasing more hotels?

Simon:

No. The reason we retained this hotel is that it is an asset preserved from the old era. There are many reasons to keep it, the most important being that the operational losses associated with the hotel can be used for tax deductions. This means that as long as we keep this hotel, we can use its tax losses to offset the profits of other future businesses. Therefore, retaining this hotel is very valuable for us. But apart from this hotel, we have now completely transformed into a company that is 100% focused on Bitcoin.

One highlight of Bitcoin reserve companies is that there is no need for true innovation; your core business is to buy Bitcoin, and the innovation lies in how you raise funds. Therefore, our main fundraising method now is the mobile warrant, similar to at-the-market stock offerings.

Should Every Company Hold Bitcoin on Their Balance Sheet?

David:

What do you think about companies that adopt a hybrid strategy? For example, Elon Musk once bought a large amount of Bitcoin for Tesla, but they are not a company focused on Bitcoin treasury. Tesla may have incorporated Bitcoin into its financial system at some point, possibly for reasons different from those of Metaplanet. For companies whose core business does not revolve around Bitcoin, do you think they should include Bitcoin as a cash alternative in their asset allocation?

Simon:

Absolutely. As we discussed earlier, Bitcoin is a very meaningful choice as an asset. Idle cash leads to depreciation, which is something we do not want to see. I understand that some Asian companies already hold gold and Bitcoin on their balance sheets, and I believe Bitcoin is a superior version of gold; it can be referred to as "digital gold." Due to Bitcoin's scarcity and decentralization, it should be an important option for every CFO in financial planning, and asset allocation should not consist solely of cash.

Recommended Reading:

OpenAI "Debunking" Robinhood: Unveiling the Four Major Controversies Behind Stock Tokenization

Going Public in the U.S.: The Ultimate Destination for Crypto Companies or a Stopgap Measure?

ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of various virtual token issuances and speculations. All content on this site is solely market information or related party opinions, and does not constitute any form of investment advice. If you find sensitive information in the content, please click "Report", and we will handle it promptly.
ChainCatcher Building the Web3 world with innovators