Short Squeal on Japanese Bitcoin Vehicle Metaplanet

Speculators are increasingly betting against Japanese Bitcoin-focused firm Metaplanet, according to lender S&P Global Market Intelligence data from April.

Metaplanet serves as a Japanese equivalent to Michael Saylor’s Chicago-based TradFi investing firm Strategy SIS, both operating by issuing debt to accumulate Bitcoin. This model is drawing scrutiny.

Analysts at 10xResearch analyzing the Tokyo-listed company concluded its market value suggests an extremely bullish Bitcoin price target of approximately $596,154. This valuation, roughly five times the current Bitcoin price of about $109,000, represents a significant disconnect raising red flags according to the research note.

“Time to short?” queried 10xResearch. “The signals we see now closely resemble past inflection points.”

While Metaplanet holds around 7,800 Bitcoin valued at approximately $850 million on its balance sheet, its market valuation has ballooned dramatically beyond this tangible asset value. The catalyst for short seller interest, points to the expectation that investors are overpaying for indirect Bitcoin exposure.

“This is a dangerous NAV distortion forming beneath the surface,” observes 10xResearch, referring to Net Asset Value – where the stock price becomes disconnected from the fundamentals.

Despite this underlying concern, Metaplanet’s stock price has surged by 233% during May alone, as interest mounts around companies using debt to back Bitcoin holdings. 10xResearch contrasts the modern enthusiasm for Bitcoin indirect access – often through inflated leverage – with the original vision of Bitcoin.

Doubts are also being voiced by short sellers. For instance, Jim Chanos, renowned for his bearish stance on crypto, is reportedly shorting Strategy through his Kynikos investment platform, while simultaneously buying physical Bitcoin for hedging purposes.

“It’s ridiculous,” Chanos stated.