Metaplanet Books $725M Q1 Loss on Bitcoin Markdowns While Advancing Japan’s First Bitcoin Perpetual Preferred Shares

Accounting Reality Meets Operational Strength

Metaplanet delivered one of the most striking earnings reports of the year, posting a net loss of 114.5 billion yen ($725.6 million) for Q1 fiscal 2026. The loss stemmed overwhelmingly from mark-to-market accounting adjustments on its substantial Bitcoin holdings as the asset declined approximately 24% during the quarter.

Under Japanese accounting standards, the company was required to record $737.6 million in unrealized valuation losses. This figure completely overshadowed the company’s underlying business performance, which showed robust expansion. Revenue climbed 251% year-over-year to 3.08 billion yen ($19.5 million),while operating profit jumped 283% to 2.3 billion yen ($14.4 million).

The company described the valuation swings as short-term mark-to-market fluctuations. Management emphasized that no Bitcoin was sold at a loss during the period, and the treasury accumulation strategy remains firmly in place.

Treasury Expansion Continues

Despite the paper losses, Metaplanet added 5,075 BTC to its holdings during the quarter at an average price between $78,000 and $79,898. Total Bitcoin reserves stood at 40,177 BTC as of March 31, valued at approximately $3.2 billion as of mid-May.

This positions Metaplanet as Japan’s dominant corporate Bitcoin holder, controlling roughly 87% of Bitcoin held by publicly listed companies in the country. Globally, it ranks as the third-largest corporate holder behind MicroStrategy and Twenty One Capital.

The company has set ambitious targets: 100,000 BTC by the end of 2026 and 210,000 BTC by the end of 2027. Growth is supported by its legacy hotel operations and a growing Bitcoin income generation business that uses options strategies to produce yield on its holdings.

Pioneering Bitcoin-Linked Preferred Shares

In parallel with its treasury operations, Metaplanet is working to introduce what would be Japan’s first perpetual preferred shares tied to Bitcoin. CEO Simon Gerovich confirmed the company is progressing with plans for this novel instrument, which would rank as only the seventh listed preferred share in the Japanese market and the first structured as perpetual.

The product aims to provide investors with exposure to Metaplanet’s Bitcoin strategy through dividend payments supported by cash flows from its Bitcoin income generation activities. The firm has already built a six-quarter track record demonstrating the ability to generate recurring revenue across varying market conditions.

Regulatory and Structural Hurdles Explain Timeline

Gerovich explained that the launch has taken longer than initially expected due to the need for thorough alignment with Japanese regulatory expectations and market practices. Preferred share dividends in Japan are expected to be backed by sustainable operational cash flows rather than simply balance sheet assets.

Additionally, the company is exploring more frequent dividend distributions — potentially monthly — which contrasts with the typical once- or twice-yearly schedule of most Japanese listed companies. This requires detailed work on record dates, calculation methods, and shareholder communications.

“The path to listing is necessarily deliberate,” Gerovich noted, highlighting the cautious nature of Japan’s preferred share market and the novelty of linking such an instrument to Bitcoin-related income streams.

Strategic Context

Metaplanet adopted its “Bitcoin Standard” in April 2024, becoming the first listed Japanese company to designate Bitcoin as its primary treasury reserve asset. The approach draws clear inspiration from MicroStrategy while maintaining active operating businesses in hotels and Bitcoin yield generation.

The preferred shares initiative represents a further evolution, aiming to integrate Bitcoin more deeply into traditional Japanese capital markets by offering income-focused investors a structured product backed by proven cash flow generation from crypto assets.