Translation: Deep Tide TechFlow

Guest: Simon Gerovich, Metaplanet CEO

Hosts: Bonnie & David Lin

Podcast Source: Bonnie Blockchain

Highlights of Key Points

You must tell all your friends and family, as well as those you care about, that now is the time to buy Bitcoin.

Bitcoin is an unparalleled high-quality monetary asset, and there is no other asset on the market that can compare to it.

Bitcoin is a superior version of gold and can be referred to as "digital gold." Due to its scarcity and decentralized nature, Bitcoin should be an important option for every CFO in financial planning, and asset allocation should not consist solely of cash.

Bitcoin financial companies provide an indirect investment avenue for investors who find it difficult to access Bitcoin directly. The innovation of Bitcoin financial companies in this regard is a disruptive change. This trend is like a black hole of capital, attracting a large amount of funds to flow into Bitcoin through Bitcoin financial companies.

If you want to invest in Bitcoin financial companies, you must ensure that these companies are fully committed, not only will they not sell Bitcoin, but they will also do everything possible to continuously increase their Bitcoin reserves.

If you ask us whether we will sell Bitcoin, my answer is absolutely not.

Companies that are execution-oriented, focused, and disciplined will gain higher market recognition, while those lacking these qualities will be eliminated.

Bitcoin is a unique asset with limited supply and increasing demand. As more people pay attention to Bitcoin, its price may continue to rise over time.

We are still in the first phase of the Bitcoin journey, which can be called the "gold rush." In this phase, our goal is to accumulate as much Bitcoin as possible. In the second phase, when Bitcoin prices rise significantly, stock prices will truly reflect the actual value of many listed companies.

In the current situation, Bitcoin is not an ideal form of currency. But it does not need to become a currency because it is an excellent store of value.

One highlight of Bitcoin reserve companies is that there is no need for true innovation; your core business is to buy Bitcoin, and the innovation lies in how you raise funds.

I believe that multiple "Bitcoin superpowers" will emerge in the future. While the United States may currently be the largest Bitcoin power, we hope to help Japan become such a country through Metaplanet.

Bitcoin Asset Companies and Premiums

David:

Today we have invited Simon Gerovich, the president of Metaplanet, to discuss the future development of Bitcoin asset holdings and the potential applications of Bitcoin in the hotel industry.

Bonnie:

The latest news is that Metaplanet's Bitcoin premium has reached nearly $600 per coin, with some articles stating that this price is too high. What do you think? Is the MNAV metric a good indicator for evaluating Bitcoin asset companies?

Simon:

Recently, many key performance indicators have indeed been proposed to evaluate Bitcoin asset companies. Among them, I believe that "Bitcoin yield" is the most important indicator, reflecting the number of Bitcoins held per share and the growth rate. This indicator has become a common tool for sell-side analysts, and Bitcoin asset companies worldwide are adopting similar evaluation methods. Therefore, when evaluating a company, one should not rely solely on a single indicator but consider multiple factors comprehensively.

MNAV (Market Net Asset Value) is an important reference indicator. It is calculated by adding the company's market value to the enterprise value of its debt and then dividing by the number of Bitcoins held by the company. This indicator will fluctuate with market interest in the company's stock and the activities the company is engaged in. I believe that Metaplanet's premium is justified. For example, for investors who wish to hold Bitcoin directly, the tax policies differ greatly between countries. In Japan, for instance, ordinary investors face personal income tax rates of up to 55% when purchasing Bitcoin directly. However, by purchasing shares of a listed company like Metaplanet, investors can indirectly hold Bitcoin in a more tax-friendly manner.

This has also driven our flywheel effect. The reasonableness of MNAV depends on various factors, the most critical of which is the company's ability to increase the "per share Bitcoin" quantity. We are currently one of the fastest-growing companies in this field globally, especially in terms of increasing per share Bitcoin. We aim to keep MNAV between 3 and 5, so as not to depress stock prices through excessive stock issuance while effectively enhancing the value of per share Bitcoin, thereby creating greater benefits for all shareholders.

A Dilemma

Bonnie:

Based on your previous points, I thought of a dilemma. There are currently some companies with ample cash flow and healthy operations; there are also some companies struggling and in distress. These distressed companies may choose to transform into Bitcoin financial companies because the risks are low, and they might gain huge returns. If these companies see their stock prices soar, even surpassing those of companies that were originally performing well, how do you think this situation will develop?

Simon:

I find it interesting that Bitcoin financial companies provide an indirect investment avenue for investors who find it difficult to access Bitcoin directly. After all, almost everyone has a securities account, and buying stocks is a familiar process for them. But if you want people to open exchange accounts, it requires additional steps. Moreover, considering past incidents where some cryptocurrency exchanges were hacked, many people may be deterred from Bitcoin and cryptocurrencies. Additionally, some traditional investors' funds do not allow direct purchases of Bitcoin, but they can buy shares of listed companies. Therefore, I believe that the innovation of Bitcoin financial companies in this regard is a disruptive change. This trend is like a black hole of capital, attracting a large amount of funds to flow into Bitcoin through Bitcoin financial companies.

Of course, caution is needed when choosing Bitcoin financial companies. The company's historical performance will become increasingly important. For example, we have a 14-month long-term performance record, while Microstrategy has a 5-year record. Additionally, the CEO's attitude is crucial; do they truly believe in Bitcoin? Will they sell their Bitcoin holdings?

This reminds me of a conference I attended in Tokyo a few weeks ago, which focused primarily on Japanese stocks. At that time, someone asked me what else I would invest in besides Bitcoin. I made a very disgusted expression, and this moment was captured by many people and shared on social media. But I want to emphasize that Metaplanet will only invest in Bitcoin and will never invest in other assets, nor will we sell our Bitcoin. Michael Saylor has also been conveying the same message. So, I believe that if you want to invest in Bitcoin financial companies, you must ensure that these companies are fully committed, not only will they not sell Bitcoin, but they will also do everything possible to continuously increase their Bitcoin reserves.

The Transformation of Metaplanet's Funding Structure

David:

Simon, can you talk to us about the initial phase of the company's transformation? You mentioned that the company was initially a struggling hotel business, which sounds interesting. How did you initially raise funds to purchase Bitcoin? How has your fundraising method evolved over the years?

Simon:

At that time, we had a series of hotels, and during the initial discussions about transforming into a Bitcoin asset company, we decided to raise startup funds by selling some hotels. Additionally, we received funding support from some like-minded investors, some of whom are also present at this meeting today. For example, UTXO Management, the sponsor of this Bitcoin conference, became one of our early shareholders. At the same time, we also had a very excellent board of directors, many of whom participated in our private fundraising at that time.

At the beginning of last year, we completed our first round of Bitcoin purchases with the funds raised, followed by a rights offering. A rights offering refers to the company providing existing shareholders the opportunity to purchase new shares. Traditionally, rights offerings are often seen as a negative signal because they usually occur only when a company urgently needs funds.

But looking back, this was actually the wisest choice we made at that time. We had about 13,000 to 14,000 shareholders who filled out a lot of paperwork to provide us with funds to purchase Bitcoin. This also established an initial connection between our Japanese shareholders and the company, as their funds were directly used to purchase Bitcoin. If you buy stocks in the market now, you are actually buying shares from other sellers; but when you subscribe for new shares, that money goes directly into the company, and you feel that this funding is specifically for helping the company purchase Bitcoin. That was our approach at that time.

This happened last summer when we raised about $60 million to $70 million. By the end of the year, we launched our first "Mobile Warrant." This warrant is a financing mechanism similar to the "At-the-Market Stock Offering" in the U.S. In the U.S., companies can directly sell new shares to the market, as Microstrategy does; but in Japan, this method is not feasible. So we designed the structure of the Mobile Warrant, issuing it to partners who would sell shares in the market and use the proceeds to exercise the warrants, ultimately obtaining newly issued shares. The effect of this mechanism is similar to the "At-the-Market Stock Offering" in the U.S.

Through this method, we successfully raised a significant amount of funds. We completed the first issuance in December last year, and the most recent one started in February this year and was just completed last week. We also officially announced that we raised about $600 million in equity through this operation. As the company scales, we can issue more shares to purchase more Bitcoin. We plan to continue using a similar "At-the-Market" operational model.

Looking ahead, we may issue convertible bonds or preferred shares, but for now, we are still focused on the equity financing stage. This financing method is the most effective because it is permanent capital that does not need to be repaid and can be fully used to purchase Bitcoin.

A Group of Copycat Bitcoin Companies?

Bonnie:

Returning to the topic you just mentioned. Clearly, Michael Saylor, like you, is a staunch supporter of Bitcoin, and Bitcoin treasury companies (companies that incorporate Bitcoin into their balance sheets) have also received a lot of support from the Bitcoin community. Nowadays, many people want to imitate your successful model after seeing your success. But you were one of the best-performing stocks globally last year, right? This makes it seem like your model is a kind of "success formula." However, many people enter this field with the wrong mindset, yet claim to be Bitcoin companies. What do you think about this?

Simon:

Overall, it is a good thing that more companies are adopting the Bitcoin standard. I believe this applies not only to companies like us that were once struggling but also to successful enterprises with a lot of idle cash.

Of course, there will always be some bad actors who see this as a shortcut to quick wealth. They might think, "If Bitcoin can boost my stock price, why not do it?" But I believe investors are rational. As more Bitcoin treasury companies emerge, it will become easier for investors to compare these companies, such as by monitoring their BTC yield (the investment return from Bitcoin) and the amount of Bitcoin held per share through various platforms. Ultimately, those companies that are execution-oriented, focused, and disciplined will gain higher market recognition, while those lacking these qualities will be eliminated.

Recently, I saw a company announce the sale of Bitcoin, and I thought that was a bit foolish. They had just announced the purchase of Bitcoin a few months ago, and now they are selling it to realize some profits in the last quarter. This behavior severely damages their credibility because investors will no longer see them as a stable channel for Bitcoin investment. Therefore, I believe that over time, the performance of different companies will gradually diverge, and investors will become clearer about which companies they support and why.

However, I also understand that the motivations for different companies to incorporate Bitcoin into their balance sheets may vary. There are many complex factors to consider.

We Will Continue to Buy Bitcoin Forever

David:

Is there a price that would make you stop buying Bitcoin, or at least slow down your purchases? If Bitcoin rises to $500,000 next week, would you still continue to buy it? Even if its price has quintupled in a week?

Simon:

I like your hypothesis. If Bitcoin rises to $1 trillion tomorrow, we might think it is overvalued and needs to be reassessed, but our plan is to continue buying Bitcoin forever. However, for now, Bitcoin's price is approaching historical highs again. Bitcoin is a unique asset with limited supply and increasing demand. As more people pay attention to Bitcoin, its price may continue to rise over time.

If you ask us whether we will sell Bitcoin, my answer is absolutely not. We want our shareholders to have the freedom to decide when to buy or sell our stock. Our goal is to be the best leveraged proxy for Bitcoin, and our most important task is to maintain focus and discipline, executing strictly according to plan. Regardless of how the market changes, we will not change our stance or make decisions that confuse investors.

Two Phases of Growth for Bitcoin Asset Companies

Bonnie:

Michael mentioned that MSTR's leverage effect is equivalent to 1.5 times Bitcoin. Many investors believe that when Bitcoin prices reach historical highs, MSTR or other Bitcoin treasury companies' stock prices should also reach historical highs. Why is this not the case in reality?

Simon:

I think it's important to look at the issue from a long-term perspective. Strategically, a company's current situation may be similar to what it was four or five months ago, but the biggest change is that the number of Bitcoins they hold per share has significantly increased. While the stock price may not fully reflect this, the company's actual value has clearly improved.

Bonnie:

That's right, but I want to say that many people do not truly understand Bitcoin. So how should they view Bitcoin? If you were to explain it to my grandmother, who is in her seventies or eighties, how would you do it?

Simon:

If your grandmother is in her seventies or eighties, I might not suggest that she hold Bitcoin herself, but she could consider long-term investments for her descendants. We are still in the first phase of the Bitcoin journey, which can be called the "gold rush." In this phase, our goal is to accumulate as much Bitcoin as possible. The total amount of the entire Bitcoin network is only 21 million, and our company currently holds more Bitcoin than any other publicly listed company, making it nearly impossible for anyone to catch up. We hope to be a leader in the industry. In the second phase, when Bitcoin prices rise significantly, stock prices will truly reflect the actual value of many listed companies. In this process, the supply-demand mechanism, Bitcoin price volatility, stock volatility, and the company's ability to execute financing will all have a significant impact on the outcome.

In this first phase, people need to understand that stock prices do not always reflect a company's intrinsic value. Just like in the early days of Amazon, despite revenue growth, the stock price did not perform well due to thin profits. At that time, Amazon reinvested most of its earnings into advertising, marketing, and network expansion. Therefore, I believe that any investor in Bitcoin treasury companies should not have short-term profit goals. Similarly, if you invest in Bitcoin, you should not aim for short-term gains. However, from a medium- to long-term perspective, Bitcoin treasury companies have the ability to generate higher returns by increasing the number of Bitcoins held per share. By purchasing shares of Bitcoin treasury companies, you can have the company handle the heavy lifting for you, such as Bitcoin reserves and management. Years later, when you look back, you will find that your Bitcoin investment exposure has significantly increased.

Explosive Growth Phase for Bitcoin Asset Companies

Bonnie:

You mentioned earlier that we are currently in the first phase, right? This is a gold rush phase similar to the Wild West, and we need to wait for the arrival of the second phase. So when do you think the second phase will arrive?

Simon:

The second phase may arrive in three to five years, or even five to seven years. By then, Bitcoin will be widely adopted globally, and its price may break through $1 million, or even reach $5 million. At that time, banks will have the capability to custody Bitcoin. If you have your own treasury, stock portfolio, or even real estate, you can deposit these assets in a bank and obtain loans against them. Currently, such functionality has not been realized in the Bitcoin space. Although some banks have announced plans to offer Bitcoin custody services, it will take time for them to truly implement and provide more attractive interest rates for Bitcoin.

In the second phase, Bitcoin will become an important component of high-quality balance sheets. I hope that by then, we can hold trillions of dollars worth of Bitcoin on our balance sheet. These Bitcoins can be deposited in major banks to obtain loans at low interest rates, and then use that capital to acquire companies focused on the Bitcoin ecosystem. For example, applying for a digital banking license or acquiring local banks to provide customers with Bitcoin-related financial services. The second phase will be full of infinite possibilities, as having Bitcoin as a high-quality balance sheet asset will open up new avenues for business development.

Game Theory Between Nations

Bonnie:

A few days ago, when I was talking to a leader of an Asian exchange, he mentioned a viewpoint: since almost all transactions are currently denominated in US dollar stablecoins, the US may have already gained an advantage in the Bitcoin space. Does this mean that other countries have fallen too far behind to catch up?

Simon:

I believe that the popularization of Bitcoin takes time. Moreover, the US strategy in the Bitcoin space may be more thoughtful than we imagine. I believe the US is actually buying Bitcoin behind the scenes, just not publicly. If they announced every purchase, it would push up the price of Bitcoin, making it impossible for them to continue buying at lower prices. However, many countries are publicly disclosing their Bitcoin purchases. For example, El Salvador and Bhutan are typical cases of publicly buying Bitcoin. I have also learned that some countries in the Middle East are announcing their Bitcoin holdings in different ways. Therefore, I believe that multiple "Bitcoin superpowers" will emerge in the future. While the US may currently be the largest Bitcoin power, I believe other countries also have the opportunity to occupy important positions in this field.

We hope to help Japan become such a country through Metaplanet. Currently, Metaplanet is the largest Bitcoin-holding company in Japan and even Asia. We hope to encourage Japan to follow in the footsteps of the US in the Bitcoin space through our efforts. Therefore, even if you feel that the pace of Bitcoin adoption is slow now, there is no need to feel disappointed. All of this takes time, and that also means we have more opportunities to buy before Bitcoin prices rise to levels that ordinary people find hard to bear.

You must tell all your friends and family, as well as those you care about, that now is the time to buy Bitcoin.

Unique Bitcoin Demand in the Japanese Market

Bonnie:

I remember you mentioned in an interview that if investors in the Japanese market want to get involved in Bitcoin assets, they basically need to go through your company, is that correct?

Simon:

Actually, there are various options in the market. Investors can buy Bitcoin directly through local exchanges, but doing so comes with a high tax burden. Therefore, when investors want to invest in Bitcoin in a more tax-friendly manner and gain returns beyond Bitcoin itself, they often choose us. The returns from directly purchasing Bitcoin depend entirely on the price fluctuations of Bitcoin; whereas if investing through a US Bitcoin ETF, due to the correlation between the ETF and Bitcoin prices, investors' returns typically do not exceed Bitcoin's performance itself. In contrast, the advantage of Bitcoin treasury companies is that we are an operating company that can flexibly utilize various tools in the capital markets, such as issuing stocks, convertible bonds, or preferred shares, to effectively enhance the value of Bitcoin per share.

Bonnie:

You mentioned three indicators—Bitcoin per share, BTC yield, and BTC gain. What are the differences between these three?

Simon:

"BTC yield" refers to the growth rate of the number of Bitcoins held per share over different periods. This year, our BTC yield is about 190%, meaning we successfully increased the number of Bitcoins held per share by 190%.

"BTC gain" translates the BTC yield into specific Bitcoin quantities. The calculation method is to multiply the Bitcoin holdings at the end of the previous period by the BTC yield. For our company, this year we added about 3,500 Bitcoins through Bitcoin operations (considering dilution factors). Then, multiplying these 3,500 Bitcoins by the current Bitcoin price gives us the "BTC dollar gain."

This indicator is mainly to help the traditional financial market understand the actual value we are creating behind the scenes. This year, our BTC dollar gain is about $400 million. I prefer to view it as a reflection of profit, although it is not true accounting profit, it does showcase potential value creation. If annualized, our BTC dollar gain could reach $1 billion. So, what should the valuation be for a company that can create $1 billion in value for shareholders each year?

The current challenge is that traditional financial markets have limited tools for evaluating companies. They can only use traditional frameworks to measure, such as revenue and profit. However, Bitcoin treasury companies are different from traditional operating companies. We do not have significant revenue, nor do we have traditional profits. Therefore, other evaluation tools need to be adopted, such as BTC yield, BTC gain, and BTC dollar gain, which can help analysts better understand the value our company creates.

Becoming the Bitcoin Company Metaplanet

David:

Before we explore your philosophy on Bitcoin, I want to understand your views on Metaplanet. Your company is often compared to Microstrategy, and some even call you "the Microstrategy of Asia." What are your thoughts on this?

I feel very honored to be compared in this way. Michael Saylor has had a profound influence on me. I often mention that during the pandemic, when my hotel business was in dire straits, I found some solace by listening to Michael Saylor's podcasts. He shared his vision of how publicly traded companies could transform and embrace Bitcoin, which was almost unimaginable at the time.

This inspired me and solidified my determination to pivot from the struggling hotel business. Therefore, over the past year, making Bitcoin our core financial asset has completely changed our situation.

David:

When you were pushing for this transformation, did investors show any resistance? Especially considering Bitcoin is a brand new asset class unrelated to your core business, how did you address these objections?

Simon:

You could say it was a blessing in disguise. Because our operating conditions were not ideal at the time, we had little choice but to seek transformation. The board and shareholders told me, "Simon, think of a way; any way to save the company can be tried." Therefore, I did not encounter much opposition in the board meetings.

However, this reminds me of a few years ago when the company was doing well, and I proposed to the board to accept Bitcoin payments in our hotels. At that time, it seemed like a very natural next step, but I was met with ridicule from the board.

They asked me why we would risk our business with such an unpopular asset as Bitcoin. So, I had to abandon that idea. But I kept thinking about whether there would be an opportunity in the future to integrate Bitcoin into our core business. Eventually, we achieved that at the right time.

Local Currency and Bitcoin

David:

How much does the performance of local currency impact your new Bitcoin acquisition strategy? For example, the yen has been continuously depreciating against the dollar and other currency baskets over the past 15 to 20 years. Would you have made this shift without that happening?

Simon:

Absolutely. I believe Bitcoin is an unparalleled quality monetary asset, and there is no other asset in the market that can compare. If you are in a market with currency depreciation, like the United States, you will find many people talking about the excessive printing of dollars and the country's massive debt burden.

Japan is in a similar situation. Many G7 countries face similar issues. In terms of GDP ratio, Japan is the most indebted country in the world, and this situation is very pronounced. The purchasing power of the yen has significantly declined. In the past, many Japanese people could proudly vacation in Hawaii, but now it has become difficult due to the depreciation of the yen. However, I believe this is not just a problem of the yen or the dollar, but a problem with the entire fiat currency system. Governments can print these currencies at will, which means that the wealth you earn through hard work can be diluted due to the arbitrary printing of money. Therefore, fiat currency is not an ideal choice for long-term wealth storage.

Bitcoin and Deflation?

David:

We all know that Bitcoin is considered a hedge against inflation. But what about in a deflationary scenario? For example, Japan experienced deflation in the early 1990s and afterward. If, in such an environment, the purchasing power of cash increases over time, what theoretical value and demand does an asset like Bitcoin have?

Simon:

That's a very deep question. However, I believe the price has already started to rebound. Japan once experienced a massive asset bubble, primarily driven by post-war economic reconstruction. I remember when I lived in Japan in the 1980s, people even wrote books claiming Japan was "number one in the world." I hope that one day Japan can reach such heights again. But at that time, it did indeed slide down from an absolute peak, and now inflation is reappearing.

If you are in an environment where the value of currency rises over time, which is deflation, the reasons for purchasing Bitcoin may seem less obvious. But Bitcoin has a key characteristic: its total supply is fixed at 21 million. Even appreciating currencies cannot directly compare to this characteristic of Bitcoin. Therefore, the value of Bitcoin does not depend on any single currency system; it can exist independently. Compared to the phenomenon of massive currency printing and inflation globally, Bitcoin is undoubtedly the best value storage tool available today.

Why Not Just Buy Bitcoin Directly?

Bonnie:

With so much Bitcoin, how do you ensure the security of these assets?

Simon:

One significant advantage of a Bitcoin Treasury Company is that it helps users overcome many technical barriers to holding Bitcoin. As we mentioned earlier, losing a private key means losing Bitcoin permanently, which is not as simple as recovering a bank password over the phone. Once Bitcoin is lost, it cannot be recovered. Therefore, if you choose to invest in a Bitcoin treasury company or invest in Bitcoin through an ETF, you can sleep soundly knowing that your Bitcoin assets will be well protected.

In fact, many Bitcoin holders do not inform their spouses or children about their private key information. If an accident occurs, these Bitcoins could disappear forever.

As a company, we place a high value on transparency. We publish all of our Bitcoin public addresses on our dashboard. This practice is crucial for us to gain the trust of investors and Japanese shareholders. Additionally, as required by law, we must custody Bitcoin with a third-party custodian approved by regulatory authorities. Therefore, we strictly adhere to this requirement. As our Bitcoin holdings increase, we will introduce more professional custodians to ensure the security of the assets. We always choose the best custodians and diversify our assets across multiple institutions to reduce risk.

Bitcoin Asset Companies Never Sell?

Bonnie:

What impact would it have on the entire system if a company claiming to be a Bitcoin reserve company engages in low buy-high sell trading and excels at it? We strongly agree with Michael Saylor's long-term holding strategy for Bitcoin, but if I choose to sell my Bitcoin, what consequences would there be beyond disappointing investors?

Simon:

Then you are not a true Bitcoin reserve company. I believe companies that engage in Bitcoin trading are more like Bitcoin hedge funds. The primary purpose of a Bitcoin hedge fund is to profit from various trading strategies in the Bitcoin market, and there are indeed many investment tools available to help you achieve that.

I know of some tools that focus on using Bitcoin-related trading strategies to generate returns, but that is completely different from the philosophy of a Bitcoin reserve company. We need to increase the number of Bitcoins held per share over time, which requires continuously accumulating Bitcoin rather than selling it.

Would You Pay with Bitcoin?

David:

Why don’t hotels accept Bitcoin for room payments now? Will this change in the future?

Simon:

This reminds me of the story of Bitcoin pizza. In the early days, someone bought two pizzas for 10,000 Bitcoins, and later Bitcoin's price skyrocketed to a million dollars. If you paid for a night’s stay with Bitcoin, and Bitcoin rose to $1 million, that would make for a very expensive room for one night.

David:

That’s hindsight, but you can’t predict Bitcoin’s price tomorrow. Is this why Bitcoin is not yet widely used as a payment tool? Because everyone believes its value will continue to rise.

Bonnie:

That’s true. People may be more inclined to spend weaker currencies.

David:

Do you think there will come a day when not only Bitcoin but also stablecoins will be widely used for hotel payments or other blockchain-based transaction scenarios?

Simon:

Blockchain is essentially just a ledger, and there are many types of ledgers on the market. In Japan, people are already very accustomed to using electronic money. You can complete payments in hotels with a simple tap on your phone. In the United States, Apple Pay is already very popular. For consumers, transaction speed is the most important factor. In the early days of buying coffee with Bitcoin, it took 15 minutes to complete the transaction confirmation. Under the current circumstances, Bitcoin is not an ideal form of currency. But it doesn’t need to become a currency because it is an excellent store of value. In the future, there may be some Bitcoin-based applications that make micro-payments a reality.

However, for a hotel company or other businesses, accepting Bitcoin payments is a smart choice. This way, you can gradually increase the amount of Bitcoin you hold and use it as an asset reserve. But the reality is that most companies need to use their income to pay for daily expenses. If you are a hotel company, profits are usually very thin, which means you may not be able to retain Bitcoin income long-term and may have to sell it to cover operating costs. However, I believe that more and more companies will choose to accept Bitcoin as a payment method in the future. In the Middle East, many people are already using Bitcoin to buy cars and apartments. Sellers are willing to accept it because they see Bitcoin as an asset with long-term appreciation potential.

The Metaplanet Story

Bonnie:

Michael Saylor once talked about how he started investing in Bitcoin, mentioning that during the pandemic, his company needed to compete with large corporations like Microsoft. What’s your story?

Simon:

To be honest, my story isn’t that complicated. We were under immense pressure at the time. Our hotels were forced to close, and in our four markets in Southeast Asia and Japan, three of the markets had hotels that were required to shut down. Revenue dropped to zero, but expenses continued. We were in a survival crisis and had to think about how to get through it. Our auditors added a "going concern warning" to the financial report, which basically warned us that our cash was insufficient to sustain the company’s operations for the next 12 months. That period was really tough.

Inspired by Michael Saylor, I shared some of his insights at a board meeting, and the response was very positive. So we decided to hold a shareholder meeting to propose investing in Bitcoin as a core financial asset. When we announced this plan, the market reacted positively, which further solidified our direction. Now, our Bitcoin strategy has been implemented for 13 or 14 months, and I am very excited about the future development, while also willing to face higher expectations and challenges.

Bonnie:

How did this story develop? Had you already started buying Bitcoin before this, or did you learn about it through YouTube? First, you must believe in Bitcoin and this strategy to continue, right? So how did your story come about?

Simon:

I actually started buying Bitcoin at the end of 2012 to early 2013. At that time, I was living in Japan and using Mt. Gox, which was the platform where many early Bitcoin buyers first encountered Bitcoin. You could say I have been a long-term enthusiast of Bitcoin. This interest helped me while running the hotel business. Whenever the hotel business faced difficulties that made me feel frustrated, I would think of Bitcoin and regain my spirits. Over the years, I have been looking for opportunities to combine my interests with business, and the crisis during the pandemic provided me with that opportunity.

Bitcoin as a Moral Responsibility

David:

I remember you once said that Bitcoin is a moral responsibility. What does that mean?

Simon:

I might say that it is a moral obligation. I believe that I and others in the industry have a responsibility to help more people understand Bitcoin. In Japan, it is currently not easy to access Bitcoin. Acquiring Bitcoin through private transactions is not common, and the exposure is very low. Moreover, the process of opening an account is very complicated. Since the Mt. Gox incident, Japan has strengthened its regulation of digital assets, which, while necessary, has also led to many traditional regulatory rules still being in place, increasing the barriers to entry. Therefore, we hope to provide Japanese investors with a simpler, tax-friendly way to purchase Bitcoin.

Additionally, we have obtained the publishing license for Bitcoin Magazine in Japan. In March of this year, we released the first issue, and the next issue will be published at the end of June. We hope to guide the Japanese people to better understand Bitcoin through this magazine. We believe it is our responsibility to educate people and enhance their financial knowledge. Therefore, the goal of Bitcoin Magazine is not to make a profit, but to serve as a platform for spreading the story of Bitcoin.

Furthermore, we have retained a hotel and renamed it the "Bitcoin Hotel." This is an opportunity for people to engage with Bitcoin in real life. People can come here to experience hotel services, visit the Bitcoin Art Museum, and we plan to collaborate with Bitcoin artists from around the world to showcase their creations. Additionally, we will establish a Bitcoin Museum to introduce the history and development of Bitcoin. There may also be a wax figure of Satoshi Nakamoto in the hotel lobby for people to take photos with. Of course, we would be very happy if you could visit when the hotel opens at the end of next year.

Metaplanet Future Strategy

David:

Speaking of hotels, aside from the function of providing accommodation and rest, Simon, what are Metaplanet's plans moving forward? You have successfully turned the company around with effective strategies; do you have any new strategic developments currently? Are there plans for expansion? Now that there is only one hotel left, will you consider purchasing more hotels?

Simon:

No. The reason we have retained this hotel is that it is an asset preserved from the old era. There are many reasons to keep it, the most important being that the operational losses associated with the hotel can be used for tax deductions. This means that as long as we keep this hotel, we can use its tax losses to offset future profits from other businesses. Therefore, for us, retaining this hotel is very valuable. But aside from this hotel, we have now completely transformed into a company that is 100% focused on Bitcoin.

One highlight of a Bitcoin reserve company is that there is no need for real innovation; your core business is simply buying Bitcoin, and the innovation lies in how you raise funds. Therefore, our main fundraising method now is through mobile warrants, similar to market-priced equity issuance.

Does Every Company Need to Hold Bitcoin on Their Balance Sheet?

David:

What do you think about companies that adopt a hybrid strategy? For example, Elon Musk once purchased a large amount of Bitcoin for Tesla, but they are not a company focused on a Bitcoin treasury. Tesla incorporated Bitcoin into its financial system at some point, possibly for reasons different from those of Metaplanet. For companies whose core business does not revolve around Bitcoin, do you think they should include Bitcoin as a cash alternative in their asset allocation?

Simon:

Absolutely. As we discussed earlier, Bitcoin is a very meaningful choice as an asset. Idle cash leads to depreciation, which is something we do not want to see. I understand that some Asian companies already hold gold and Bitcoin on their balance sheets, and I believe Bitcoin is a superior version of gold; it can be called "digital gold." Due to Bitcoin's characteristics of scarcity and decentralization, it should be an important option for every CFO in financial planning, and asset allocation should not consist solely of cash.

Recommended Reading:

OpenAI "Debunking" Robinhood: Unveiling the Four Major Controversies Behind Stock Tokenization

Going Public in the U.S.: The Ultimate Destination for Crypto Companies or a Stopgap Measure?

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。