Mercury Rising: How Metaplanet Just Engineered Cheaper Bitcoin Capital Than Strategy

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Mercury Rising: How Metaplanet Just Engineered Cheaper Bitcoin Capital Than Strategy

Metaplanet has just launched an elegant alternative to Bitcoin treasury financing instruments.

The company’s new Mercury perpetual preferred equity — a Class B preferred share paying 4.9% fixed dividends with 1:1 conversion rights into common stock at ¥1,000 per share — represents a notable departure over Strategy’s complex multi-tranche preferred structures. 

Even though Michael Saylor pioneered Bitcoin-backed preferred equity by paying investors 8% to 12% yields, Simon Gerovich’s Metaplanet has structured a new capital structure that cuts financing costs nearly in half while maintaining the same non-dilutive characteristics that make preferred equity so powerful for treasuries to continue accumulating Bitcoin.

The initial $150 million Mercury issuance was allocated exclusively to institutional investors via a third-party allotment, positioning the security as a “pre-IPO financing round” before potential public listing. 

Much like Strategy’s STRC launch — which placed itself first with institutions and later public trading — Mercury comes with terms that are considerably more attractive for investors based on a preferred equity pricing strategy. 

How so? At 4.9% annual dividends, Metaplanet is raising capital at less than half the cost of Strategy’s 10% to 12% STRC and SATA yield, and significantly below the 8% floor that most Bitcoin treasury preferred securities have established as the market standard. 

The mathematics behind the strategy reveal why this matters so much for long-term Bitcoin accumulation. Every dollar raised through Mercury costs Metaplanet just 4.9% annually in dividend obligations. If Bitcoin appreciates at its historical compound annual growth rate of 50% to 100% over multi-year periods, the company essentially borrows at 4.9% to invest in an asset returning more than tenfold that rate. 

Compare this to Strategy paying 10% on STRC. Saylor’s capital costs are more than double Gerovich’s, meaning Metaplanet can deploy the same dollar amount toward Bitcoin purchases while paying half the ongoing financing expenses. Over a five-year horizon, this difference compounds dramatically — $150 million raised through Mercury costs about $36.75 million in cumulative dividends, while the same amount raised through STRC-equivalent securities at 10% costs $75 million.

Additionally, Metaplanet’s conversion mechanism demonstrates sophisticated financial engineering. Mercury preferred shares convert 1:1 into Metaplanet common stock at ¥1,000 per share — straightforward math that any institutional investor can evaluate instantly. 

Secure Digital Markets | SDM.co

SDM provides unparalleled liquidity, execution speed, and bespoke customer service, making it the top choice for institutional investors seeking reliable digital asset trading solutions. With deep expertise in capital markets and strict regulatory standards, SDM stands out as the premier platform for all digital asset treasury teams looking to optimize their trading and treasury operations.

Learn more:

By contrast, Strategy’s STRK converts at a 10:1 ratio (ten preferred shares become one common share), requiring investors to perform additional calculations to understand dilution impact. The cleaner 1:1 structure removes cognitive friction while maintaining the same economic incentives: preferred holders convert only when common stock trades significantly above ¥1,000, ensuring conversion happens at a premium to net asset value rather than destroying per-share Bitcoin exposure for existing common shareholders.

Embedded optionality

Both Metaplanet and Mercury holders are benefited by the embedded optionality that comes with the ¥1,000 strike price. With current Bitcoin prices around $82,000 and Metaplanet’s 30,823 BTC generating substantial net asset value, the company can issue Mercury perpetual preferreds that function like permanent debt unless common stock appreciates dramatically.

If Metaplanet’s stock reaches ¥1,500 to ¥2,000 in conjunction with a two or threefold spike in Bitcoin’s price, then Mercury holders can convert their preferreds into common stock at the ¥1,000 strike, capturing upside while Metaplanet effectively raises capital at what becomes a premium mNAV multiple. Until conversion, the company pays just 4.9% annually — cheaper than most corporate debt and dramatically cheaper than equity dilution at current valuations.

To explain the remarkably low 4.9% yield, we should understand the institutional-only third-party allotment structure that positions Mercury as pre-IPO financing rather than retail security. 

Japanese institutional investors — pension funds, insurance companies, regional banks, operate in a near-zero interest rate environment where 4% to 9% fixed income represents attractive yield, especially when compared to Japanese government bonds that offer a meager 1% or less. Moreover, these institutions can’t easily access Bitcoin directly due to regulatory constraints, making Mercury an ideal proxy. 

The “pre-IPO” framing also suggests that Mercury may eventually list publicly on the Tokyo Stock Exchange, creating liquidity similar to how STRC trades on the Nasdaq, but the initial institutional placement locks in favorable terms before retail demand potentially compresses yields. 

Some important questions do remain about whether Mercury’s favorable terms reflect sophisticated engineering or structural weaknesses. Japanese institutional investors accepting 4.9% yields may signal desperation for any positive return in a zero-rate environment rather than validation of Metaplanet's strategy.

These same institutions might be reaching for yield on securities they don’t fully understand yet, similar to how U.S. institutions bought AAA-rated mortgage securities in 2007 because they paid more than Treasuries. Moreover, the more than -20% unrealized loss on Metaplanet's Bitcoin position could make Mercury holders nervous rather than confident. Especially if Bitcoin remains suppressed at $82,000 for prolonged periods of time, preferred investors that earn 4.9% annually while taking equity-like downside risk might end up watching their conversion optionality not remain so attractive anymore.

Mercury also remains completely untested compared to Strategy's battle-proven preferred structures. STRC has traded publicly for months, established liquidity, paid dividends consistently, and demonstrated that institutional markets will provide continuous capital through multiple Bitcoin volatility cycles.

Mercury exists only as a private placement with no secondary market, no trading history, and no proof that the 1:1 conversion mechanism works as designed when tested by real market stress. Metaplanet’s claim that this represents an "improvement" over Strategy's model assumes execution — something Gerovich must still prove at scale, even if he has done already with the firm’s continuous Bitcoin acquisitions.

Challenging Strategy’s dominance

Metaplanet’s more than -20% unrealized loss — the firm’s average cost basis sits at $108,036 against a $82,000 Bitcoin price tag — makes the timing launch particularly strategic. Issuing preferred equity while showing paper losses demonstrates confidence that Bitcoin will recover and exceed the cost basis, validating the treasury strategy despite near-term drawdowns.

And the 4.9% dividend becomes trivial if Bitcoin returns to its previous all-time high, wherein Metaplanet would reap 11% gains on its entire position. 

Mercury investors are basically betting that Metaplanet’s Bitcoin accumulation strategy works over the next three to five years, accepting a 4.9% yield plus conversion optionality instead of demanding 10% to 12% like Strategy’s U.S. institutional base requires. 

Strategy’s preferred equity dominance is now facing a unique challenge. If Mercury successfully deploys Mercury at 4.9% while Strategy pays 10-12% on functionally similar securities, Michael Saylor faces pressure to reduce STRC dividends or accept that his capital structure costs double what Asian competitors pay. 

Geographic arbitrage in preferred equity pricing — Japanese institutions accepting 4.9% while American institutions demand 10%+ — creates permanent cost advantages for Tokyo-listed treasuries over Nasdaq equivalents. This doesn’t make Strategy's model wrong, however, but it proves that smarter structuring and different investor bases can cut Bitcoin treasury financing costs in half.

Metaplanet’s Mercury isn’t just another preferred equity issuance copying Strategy’s playbook. It’s a different approach that prioritizes lower capital costs over the institutional marketing Strategy emphasizes.

To be sure, Mercury still has to lists publicly, attracts billions in institutional capital like STRC has, and survives a Bitcoin bear market while maintaining investor confidence.

The question now is whether other treasuries adopt Mercury’s low-cost approach or continue paying Strategy-level yields because U.S. markets demand higher returns.

Special thanks to our partners:

• o21 Solutions. o21 develops and implements Bitcoin-powered corporate strategy, transforming value chains with strategic expertise and tailored advisory services, with a focus on both Treasury and Operations - balance sheet accumulation, mining, and payments. Reduce cycle time through the corporate Bitcoin adoption journey through our pre-packaged or tailored engagements. Learn more: o21 Solutions

• Cryptio. Cryptio is an enterprise-grade accounting software platform built specifically for digital assets and cryptocurrencies. It enables businesses to transform blockchain transaction data from multiple exchanges and custodians into auditable financial records, supporting compliance with GAAP and IFRS standards. Learn more: Cryptio

• AnchorWatch. AnchorWatch makes Bitcoin ownership safer and easier by combining advanced custody expertise with industry-grade insurance. As a Lloyd’s of London Coverholder, it writers specialized policies that address digital-asset risks, giving clients trusted coverage and peace of mind. Learn more: AnchorWatch

• Stacking Sats Inc. Official IT partner at BitcoinTreasuries, Stacking Sats Inc via its subsidiary, Framework IT, is a managed IT services firm with a 17-year track record of providing bet-in-class IT support, strategy, and cybersecurity, boasting high recurring revenue and long-term client contracts. It’s also one of the top 20 holders of Bitcoin among global private companies. Learn more: Stacking Sats Inc

• Orange Wheel Advisors. Orange Wheel Advisors is a strategic consulting firm that helps companies navigate Bitcoin’s impact on corporate finance and competitive strategy. With expertise spanning treasury management, payments, capital structure, mining, and investor communications, they provide executive education, tailored strategies, and execution support to guide businesses through the global monetary transition. Learn more: Orange Wheel Advisors

• Secure Digital Markets (SDM) provides unparalleled liquidity, execution speed, and bespoke customer service, making it the top choice for institutional investors seeking reliable digital asset trading solutions. With deep expertise in capital markets and strict regulatory standards, SDM stands out as the premier platform for all digital asset treasury teams looking to optimize their trading and treasury operations. Learn more: Secure Digital Markets (SDM)

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