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Metaplanet in a Bitcoin frenzy: Record purchases and short squeeze shock Wall Street!
Metaplanet invests heavily in Bitcoin and influences the market. Highest ETF inflows and volatile stock movements characterize the scene.
Metaplanet in a Bitcoin frenzy: Record purchases and short squeeze shock Wall Street!
Metaplanet, formerly known as Red Planet Japan, recently made a drastic change in strategy and is now investing heavily in Bitcoin. On Monday, the company acquired 1,004 new Bitcoins and now holds a total of about 7,800 BTC, worth around $800 to $860 million. Metaplanet's share price has been volatile: it rose from $1.51 in March to a high of $16, then fell to $7.50 and is currently trading at around $9.00. The company's market cap is between $5 billion and $7 billion, which seems inflated compared to its Bitcoin holdings. The price rally was triggered by a short squeeze, similar to the phenomenon seen with GameStop.
The current developments in the Bitcoin market are reflected in the numbers for Bitcoin ETFs. In the USA, these reached a record volume of over 25 billion US dollars, with net inflows of 2.75 billion US dollars, the second highest value since records began. BlackRock's IBIT fund controls over 3.3% of all Bitcoin in circulation and manages more than $71 billion. Additionally, Ethereum ETFs posted their best performance since February with nearly $250 million in inflows.
Metaplanet and the short squeeze situation
Of particular note, Metaplanet is Japan's most shorted company, with over 25% of shares borrowed for short selling. CEO Simon Gerovich shared this information on X (formerly Twitter). Despite record-breaking sales of ¥877 million ($6 million) in the first quarter, where 88% was attributed to the Bitcoin strategy, interest in short selling continued to rise. The stock price fell 12.84% in the last seven days and experienced trading halts for two consecutive days on May 21 as the price reached the daily limit.
The Bitcoin community compares the Metaplanet situation to the GameStop frenzy of 2021, but the current rally relies on Bitcoin as a stable foundation. Metaplanet has grown from a hospitality company to Japan's largest corporate holder of Bitcoin. Additionally, the company uses a put sell strategy on Bitcoin futures to purchase BTC at a discount or generate income for further purchases. The stock price is currently locked in the limit-up zone, indicating a possible rise when trading resumes.
Market dynamics and institutional demand
The Bitcoin market remains bullish despite short-term political influences, such as US President Donald Trump's announced tariff increases on EU imports, causing uncertainty. The US Federal Reserve signaled that it is ready to pump liquidity into the market, which could support future capital inflows into the crypto market. High institutional demand is also evident in the ETF inflows, and analysts see a target of $210,000 for Bitcoin. In a remarkable trend, over $300 million in Bitcoin has moved again after ten years of inactivity.
Jerome Powell, the Federal Reserve Chairman, is also seen as a possible influence on markets, although opinions remain divided on future price movements. Meanwhile, long-term exposure to Bitcoin continues to be a hot topic for investors, despite the high volatility and associated risks.
Overall, it shows that Metaplanet's strategic decisions operate in a dynamic environment that harbors both high opportunities and significant risks. Developments will continue to be monitored as more and more investors enter this exciting and challenging market.