Japan's MicroStrategy Metaplanet stock price has fallen 50% in two months, is the Bitcoin flywheel effect failing?

Japan's version of MicroStrategy, Metaplanet, encounters resistance with its flywheel, leading to a significant plunge in stock price and a shift to traditional fundraising, ringing alarm bells for the company's Bitcoin strategy. (Background: Can Bitcoin hold above the critical line of 108,000? Analyzing chip distribution and holding costs.) (Supplementary background: Legendary trader Eugene: Bitcoin's weakness makes it hard for altcoins to break through, CryptoQuant analysts warn BTC may retest $100,000.) Japan's publicly listed company Metaplanet, which emulated MicroStrategy, significantly boosted its stock price through the "Bitcoin flywheel," but now faces the reality of a tightened funding chain regarding its plans to expand BTC holdings. According to the latest report from Bloomberg, Metaplanet's stock price has plummeted 54% since mid-June, its flywheel mechanism has stalled, and management has had to seek emergency funds from traditional markets. This sudden turn of events is not just a test of risk management for a single company, but also reflects the liquidity and valuation challenges enterprises must face when embracing Bitcoin. Flywheel Stalling: Stock Price Decouples from Bitcoin Metaplanet previously issued warrants (MS warrants) to partner Evo Fund to exchange for cash, using the raised funds to buy Bitcoin, creating a self-reinforcing "flywheel effect." However, when Bitcoin fluctuated narrowly, Metaplanet's stock price fell sharply, and Evo Fund lacked incentives to exercise the warrants, causing cash sources to dry up instantaneously. Data shows that Metaplanet currently holds 18,991 Bitcoins, ranking seventh in the world, but there is a discrepancy between stock price and asset value, with the "Bitcoin premium" shrinking from eight times to two times, directly hindering the pace of expanding holdings. Fundraising Shift: Preferred Stocks and Overseas Issuance in Tandem After the flywheel stopped, Metaplanet's team, led by former Goldman Sachs trader Simon Gerovich, proposed two traditional fundraising options. First, to initiate an overseas public offering of approximately 130.3 billion yen; second, to apply for the issuance of up to 555 million preferred shares, which could raise a maximum of 555 billion yen. Gerovich described preferred shares as a "defensive mechanism," as they can inject funds during times of stock price slump while delaying the dilution of common stock. The plan is designed with a 6% annual dividend, aiming to attract Japanese investors who prefer cash flow. However, Natixis analyst Eric Benoit cautioned: "The Bitcoin premium will determine the success of the entire strategy." Rapid convergence of the premium means that subsequent issuance conditions may become stricter, adding to market anxiety over shareholder equity dilution. Market Warning Signals: The Pull of High-Volatility Assets and Equity Structure Metaplanet's experience may offer three insights for companies adopting Bitcoin: First, if a balance sheet is deeply tied to high-volatility targets, stock prices will be unusually sensitive to market sentiment. Second, when valuation decouples from asset value, existing fundraising mechanisms may fail instantaneously. Third, investors focus not only on the number of Bitcoin holdings but also on whether liquidity can be maintained at low cost and low dilution. Once the flywheel stalls, subsequent recovery often relies on more expensive traditional capital, which is particularly challenging in the current high-interest-rate environment. Related Reports: Interpreting the Six Current Situations in the Web3 AI Race: Institutions Are More Concerned About Infrastructure Compared to AI Agents. AI Agents Merging with Web3: Is the Era of Bots for On-Chain Wealth Management Coming? Complete Introduction to Mind Network: Solving AI Agent Security Issues with FHE Technology. <Japan's MicroStrategy Metaplanet's stock price has plummeted 50% in two months; has the Bitcoin flywheel effect failed?> This article was first published in BlockTempo, the most influential blockchain news media.