Corporate Bitcoin (BTC) government bond trading, which was active until the second quarter, hit a wall in the fall.
Listed companies added 159,107 BTC in the second quarter, bringing their total holdings to about 847,000 BTC, about 4% of the supply limit, proving that “Bitcoin on the balance sheet” worked as a capital market ploy.
Then the easy money stopped. Flows into digital asset treasury names tracked by NYDIG fell to their lowest daily levels from mid-June through September and October.
The premium to net asset value (mNAV) compressed across the cohort, pushing some bonds closer to parity or below parity. If a stock is trading below book value, issuing shares to buy more Bitcoin will dilute the value of existing holders.
Metaplanet faced that constraint in late October when its mNAV ratio fell below 1. On October 31, the Tokyo-based company withdrew $100 million from its Bitcoin-backed credit agreement and used the proceeds to acquire additional BTC, its option premium “Bitcoin Income” business, and share buybacks.
Three days earlier, the company had announced a one-year buyback of up to 150 million shares, representing about 13% of its float, and a $500 million BTC-backed credit facility to fund further Bitcoin purchases if needed.
As of October 31st, Metaplanet holds approximately 30,823 BTC and remains committed to reaching its goal of 210,000 BTC by 2027.
| date | company | move | size/value | after bitcoin | sauce |
|---|---|---|---|---|---|
| November 3rd | Strategy (formerly MicroStrategy) | Additional purchase | 397 BTC for approximately $45.6 million | 641,205BTC | Strategy Form 8-K/Press Page. |
| October 31st | metaplanet | Borrowed a BTC-backed loan to fund the purchase/repurchase | $100 million credit withdrawal | 30,823BTC | Yahoo Finance. TradingView/Cointelegraph summary. |
| October 27th | Bitplanet (KOSDAQ) | Starting a rules-based financial program | First purchase: 93 BTC | 173BTC | Yahoo Finance. CMC Academy commentator. |
| September 30th | hut 8 | Strategic BTC Reserve Expansion | 13,696 BTC added to reserves | 13,696BTC | Company Q3 Release/PR. |
| September 22nd | Strive Semler | All stock trading. BTC will be added | Strive announces acquisition of 5,816 BTC for approximately $675 million through merger | >10,900 BTC total (planned) | Reuters Trading Report. |
If the market does not pay a premium, credit substitutes for equity.
Metaplanet's latest move tests whether BTC-backed credit can replace equity premium financing when valuations are compressed.
The strategy that worked in the second quarter of issuing shares at a premium to mNAV and using the proceeds to buy Bitcoin, increasing BTC per share, relies on investors paying more than book value for exposure.
When that premium is no longer available, the stock issue becomes dilutive. Securing credit for existing BTC holdings provides a way to continue accumulating without selling coins or issuing dilutive shares.
The trade-off is clear. Borrowing against BTC introduces collateral risk. Larger drawdowns can increase loan-to-value ratios and, in the worst-case scenario, potentially force deleveraging or asset sales.
Floating rate exposure adds a second vector. As the price of the dollar benchmark increases, the cost of carry becomes negative.
However, once BTC stabilizes and the stock discount ends, a combination of share buybacks and collateralized credit will increase BTC per share without the use of common stock. Metaplanet is betting that the line of credit can be used as bridge financing until the equity premium is rebuilt.
Flexibility in early repayments is important. If BTC rises and the stock price revalues, the company can refinance or repay the loan and go back to issuing stock.
Broader Treasury Cohort Reactions
Strategy revealed additional BTC purchases in July and once again highlighted its Bitcoin balance sheet in its third quarter report. Still, the company built its financials over multiple years when the equity premium was more stable.
New entrants that increased their holdings during the second quarter's rally are now facing the same valuation pressures that Metaplanet is facing, consisting of premium compression, mNAV discounts kicking in, and equity issuance levers being deactivated.
The question for the remaining groups is whether the Metaplanet approach serves as a template or a warning. If the loan is successful, other government bonds facing similar valuation gaps are likely to follow suit, given that the buyback eliminates the mNAV discount and stabilizes BTC.
Infrastructure and potential impact
While BTC-backed credit is not new, its application to corporate finance strategies is relatively new. Custodians and prime brokers have been building infrastructure for Bitcoin-backed lending over the past few years, initially serving hedge funds and their own trading desks.
The mechanism is simple. It pledges BTC as collateral, withdraws cash at a loan-to-value ratio that leaves a volatility margin, and pays a floating interest rate linked to a dollar-denominated benchmark.
What has changed is the profile of the borrower. Corporate finance offers different incentives than a trading desk. They are optimizing BTC per share, not absolute P&L, and they borrow to accumulate and buy back shares, not to trade.
This change transforms collateralized credit into a capital structure tool rather than a margin facility.
If Metaplanet's approach is successful and other Treasurys adopt BTC-backed credits to protect per-share metrics, the unconstrained supply of corporate BTC will shrink.
This could reduce float and amplify volatility if multiple government bonds face margin calls at the same time during a drawdown.
For allocators, this means treasury premiums depend on leverage and capital structure rather than pure Bitcoin exposure. A company with no debt and trading at 1.2x mNAV is a different bet than a company with a $500 million BTC-backed loan trading at 1mNAV.
If credit acts as a substitute for equity issuance, bonds can continue to accumulate during periods when stocks are trading below book value. This removes one brake on the accumulation cycle of equity dilution and replaces it with the stricter constraint of collateral security.
Constraints that can derail you
Structural risk is reflexive. If enough government bonds borrow against BTC to continue purchasing, there will be demand to increase the value of the collateral and more borrowing will be possible. That model works until it stops working.
A macroshock that causes BTC to decline by 30% or 40% could trigger a cascade of margin calls across leveraged government bonds, forcing asset sales and accelerating the decline.
A second constraint is introduced for floating rate exposures. If the Fed holds interest rates for longer, the cost of servicing BTC-backed debt will rise.
Once a certain threshold is reached, the interest paid exceeds the valuation needed to justify the loan, and the Treasury either prepays the cash or drains it.
The stakes are whether BTC-backed credit can restart corporate accumulation when the stock market doesn't cooperate, or whether it will amplify the downside of overleveraged government bonds at the wrong time.
MetaPlanet's $100 million drawing will test the thesis in real time. If the company ends the mNAV discount, continues to accumulate, and refinances before collateral and interest rate risks materialize, this strategy could be replicated with other government bonds facing similar valuation pressures.
If BTC corrects hard enough to force deleveraging, the lesson is that credit can only substitute for capital if collateral values match.
The answer will come in the next 6-12 months, as BTC stabilizes and allows Metaplanet to de-leverage, or it falls enough that borrowing and buying volatile assets to buy more proves to accelerate not only gains but also losses.
