Original Title: Metaplanet Is Trading at $596,154 per Bitcoin—Time to Short?

Original Author: 10x Research

Original Translation: jk, Odaily Planet Daily

Bitcoin has surged $15,000 in a matter of weeks—but not for the reasons the market commonly assumes. The stock price of a "little-known" Japanese listed company, Metaplanet, reflects a Bitcoin implied value of up to $596,154, more than five times the actual market price. Meanwhile, the Asian trading session is quietly shaping the market narrative, with a dangerous Net Asset Value (NAV) distortion brewing beneath the market's surface.

As volatility continues to decline and retail fund flows shift, the signals we are observing bear a striking resemblance to key historical inflection points. From Japan's bond market to currency flows and to cryptocurrency custody tools (such as Metaplanet), some anomalies are occurring—but have yet to surface in mainstream news. If you are looking for the starting point of the next major market move, this report is worth a read.

Bitcoin vs. MicroStrategy vs. Metaplanet—Who Is Most Likely Overvalued?

Key Takeaways:

· Bitcoin is undoubtedly one of the most transformative innovations of the 21st century, but many misconceptions surrounding it still persist. One of the most fundamental principles—“Not your keys, not your coins”—is rarely given true consideration. Today's market has strayed far from Satoshi Nakamoto's original vision of a "peer-to-peer electronic cash system."

· Today, billions of dollars in retail funds are attempting to gain Bitcoin exposure through various financial instruments, many of which often require paying a hefty premium. In some cases, investors have unintentionally purchased Bitcoin at a price of $596,154, while the actual market price is only $109,000, resulting in a premium of 447%.

· Some of our market views have sparked controversy but have been repeatedly validated by the market as highly forward-thinking. It is worth noting that in December 2022, we pointed out that Grayscale's GBTC was trading at a 47% discount to NAV (Bitcoin price was $18,000 at that time) and listed it as a key investment recommendation for 2023 (other recommendations at the time included Solana at $13.70). The market sentiment was extremely bearish then, with widespread concerns about an economic recession.

· On January 29, 2024, we published an opinion stating: "MicroStrategy May Be More Investment Worthy Than a Bitcoin ETF." At that time, the company's stock was trading at a 7% discount compared to its Bitcoin holdings value, effectively capturing the starting point of its subsequent market value reassessment. We also highlighted on October 7, 2024, that MicroStrategy was poised for a breakthrough when its stock price was $177 (now risen to $380).

Body

Most people have no idea what Net Asset Value (NAV) is, let alone that they may have paid a hefty premium when gaining Bitcoin exposure. Some investors believe they are getting some kind of upward leverage effect, similar to the logic of Wall Street selling gold mining stocks to retail investors: these stocks are packaged as leveraged bets on the rising price of gold, especially when institutions need to sell stocks to retail investors.

Currently, MicroStrategy's stock price implies a Bitcoin price of $174,100, although this premium is not extreme, it is still significant. After all, when there are already Bitcoin ETFs offering exposure at the actual market price (around $109,000), who would be willing to pay such a high price? The answer often lies in information asymmetry, lack of awareness of NAV, or the effectiveness of marketing rhetoric.

Whenever MicroStrategy issues new shares to retail investors, the Bitcoin value behind these shares accounts for only a small part of their stock price, and the company profits from the difference, packaging it as so-called "Bitcoin gains." Existing shareholders applaud this, as new incoming investors are essentially indirectly purchasing Bitcoin at $174,100 per coin, while the company uses this capital to buy BTC at market price. In the long term, this will dilute the Net Asset Value (NAV) per share, with all these costs borne by the new shareholders.

Although the crypto media has called this operation a "financial engineering masterpiece," the reason this model works is that most retail investors no longer directly purchase complete bitcoins. The price of one BTC is now higher than that of a new car (above $45,000). Since Bitcoin's price broke through this psychological threshold, MicroStrategy's NAV has skyrocketed, supporting its so-called "Bitcoin gains" strategy — but from another perspective, this is actually "milking retail investors to finance its Bitcoin empire."

As we have pointed out before: as volatility decreases and MicroStrategy's NAV is diluted, the company's ability to buy Bitcoin through share issuance is gradually being constrained. However, in the past month, the company has still managed to purchase $4 billion worth of Bitcoin, an operation almost unparalleled. In contrast, Japan's Metaplanet, despite a soaring stock price, has only bought $283 million worth of Bitcoin during the same period, currently holding 7,800 BTC (book value around $845 million), with a market capitalization of $4.7 billion, corresponding to an implied price of $596,154 per BTC.

Given that its average cost basis is $91,343 per coin, Metaplanet's unrealized gains would be completely wiped out as soon as the Bitcoin price drops by 15%. It is worth noting that just a year ago, the company was only a $40 million market cap traditional hotel business. With the yen strengthening (as the USD/JPY exchange rate declines), intensified capital outflows, and Japan entering a new economic phase, a decrease in foreign tourists could directly impact its core business — hotels. Furthermore, behind the recent $15,000 surge in Bitcoin, the majority of which occurred after a Bank of Japan policy meeting. During the meeting, official economic growth forecasts were significantly revised downward, while Japanese government bond yields soared, and bond auction demand weakened. Meanwhile, various Asian currencies, such as the New Taiwan Dollar, appreciated significantly, although officials denied engaging in any discussions with the Trump administration regarding currency appreciation.

Increasing evidence suggests that Bitcoin's recent price action is mainly being driven by the Asian trading sessions, potentially influenced by Michael Saylor's suggestive tweets about Bitcoin purchases or a surge in Japanese retail activity. Over the past 30 days, Bitcoin has seen an overall increase of 16%, with a 25% surge during Asian trading hours. In comparison, the U.S. market session has had minimal contribution (mostly sideways price movement), while the European session experienced an 8% decline. This further indicates that Asia is currently the dominant force in Bitcoin pricing. If capital outflows from Asia begin to weaken, Bitcoin may enter a consolidation period.

It is worth noting that Google Trends show Japan has not experienced widespread retail enthusiasm for Bitcoin, indicating that Metaplanet's parabolic stock price surge may have been primarily driven by speculative funds rather than broad public interest. At its current market cap, the stock price trades at 5.47 times its NAV, which is a 447% premium, presenting an attractive arbitrage opportunity. Hedge funds can express a market view through a paired trade: buying five Bitcoins while simultaneously shorting $550,000 worth of Metaplanet stock (approximately 70,000 shares at ¥1,116 per share, calculated at a USD/JPY rate of 142). The attractiveness of such trades is increasing, especially with Japan expected to approve a Bitcoin ETF in the next 12 months, which could significantly compress Metaplanet's NAV premium, leading to a more rational valuation.

Although we accurately predicted Bitcoin's rally since April 12th, we believe the current price level presents a reasonable opportunity to take profits. If Bitcoin's price surpasses $105,000, traders should consider reducing their long positions.

The options market has issued a warning signal: Bitcoin's implied volatility skew — the difference in implied volatility between call and put options — has dropped to nearly -10%, indicating that call options are being priced significantly higher than put options. In other words, traders are actively chasing an upward trend rather than hedging against downside risks. In our experience, such extreme skew levels often reflect a market in a euphoric top sentiment, serving as a typical contrarian signal.

Our various technical reversal indicators (such as the Relative Strength Index (RSI) and the Stochastic Oscillator) are currently showing overbought signals and starting to reverse downwards, forming a divergence with the Bitcoin price. The current price gap between Bitcoin and our trend signals has reached $20,000, and this gap is narrowing, indicating a weakening market momentum. We have maintained a bullish view since mid-April (which was a contrarian view at the time), but now believe that reducing risk exposure and waiting for a more favorable re-entry point is wiser.

Chart Caption: Bitcoin (left axis) vs. Stochastic Oscillator (right axis) — Divergence is widening

While the price surge of the past six weeks has been impressive, the essence of trading lies in risk-adjusted return management rather than blindly following trends. At the current overvalued levels, the last wave of retail investors buying into Metaplanet may face a heavy price to pay.

Conclusion

Now is the time to lock in some profits. We advised buying put spread options on MicroStrategy last Friday, and as of now, the stock has dropped 7.5%, realizing a 66% gain on that strategy. Next, Metaplanet seems poised to be the next target for a valuation pullback in the coming months. Expressing this view through a hedged short position against Bitcoin could be an effective approach. From a broader market perspective, as June approaches and the traditionally slow summer trading period sets in, we believe Bitcoin itself may enter a period of consolidation and volatility. In this current phase, it is more important to focus on profit-taking and risk control rather than blindly chasing highs.

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