Many listed companies have begun to leverage their bitcoin holdings as collateral resources, and Tokyo-listed Metaplanet has just accessed a nine-figure loan based on its bitcoin holdings for purchasing more bitcoin and conducting corporate actions, marking a strong indication that bitcoin as a means of corporate funding is shifting from being niche to mainstream. (cryptobriefing)
Metaplanet’s BTC-backed loan signals bitcoin going mainstream in corporate finance. (Image Source: X)
Why This Matters Now
Corporations can now capitalize on bitcoin without generating a taxable event or an indication of immediate abandonment of the asset class. All this means that boards and funds can hedge their bitcoin bets, providing opportunities for growth, buybacks, and other operations, and achieving these goals through immediate cash flows, while still having upside potential on bitcoin appreciation. As a consequence, there is a new book of rules for corporations that involve managing balance sheets more than just cash, bonds, and now cryptocurrencies as well.
How It All Happens: Explained Simply
The company borrows some of its bitcoin holdings against a loan or pledge to a lender or custodian of funds. Based on market conditions, loan-to-value (LTV) is set, such that when markets are turbulent, LTV is low, and vice versa. Next, a loan is made, this time in fiat or stablecoin. If the bitcoin price falls below certain levels, margin or liquidation triggers are invoked. Thus, businesses can borrow, repay, and retain control of strategic bitcoin holdings. Easy, straightforward, and quick, as opposed to raising capital through equity or core asset sales.
Metaplanet: Case Study On Public Treasury Leverage
Metaplanet, a former hotel developer, has successfully diversified into a bitcoin treasury manager and, more recently, has accessed approximately US$100 million of funding via BTC as collateral for future purchasing and repurchases of its shares. What is of note about these headlines is that Metaplanet is neither a ‘giant tech’ firm nor is it a ‘MicroStrategy,’ as it is a listed non-USA firm and demonstrates that this ‘playbook’ is region- and scale-agnostic.
The Strategic Logic For Companies
There are at least three strong motivations that lead corporations into crypto-backed borrowing:
- Capital Efficiency. Holding appreciation assets and having access to cash means that this is ideal for companies that have faith that bitcoin will appreciate over time.
- Speed And Flexibility. Credit facilities that are collateralized can be accessed quickly, as compared to equity or bonds that have longer issuance times.
- Balance Sheet Signalling. Because they issue debt instead of selling, these firms demonstrate commitment to bitcoin while funding other immediate plans (M&A, buybacks, operations).
- Boards usually consider these advantages against risk and governance pressures caused by market volatility as well. And for treasury executives, this is about financial engineering, while for general counsels and auditors, this is about control and legal issues of disclosure. (ideas.repec.org)
Who’s Lending And Why They Say Yes
Crypto borrowers are serviced by specialized crypto lenders, hedge funds, and, more recently, banks and large custodial organizations exploring institutional products for themselves. Where crypto native firms had previously dominated, banks interested in fee revenue and demand from clients are slowly lining up to provide structured credit secured on digital assets, albeit typically on tougher terms and haircuts than was previously the case for crypto credit.
Risk Mechanics: Volatility, Re-hypothecation And Audit
It is elegant until it meets two tough truths. First, bitcoin price fluctuations lead to rapid LTV reversals. Second, custody and re-pledging rules, or whether loaners can revalue securities, pose non-trivial counterparty risks. Third, and most recently, auditors and supervisory authorities note that crypto treasuries pose a challenge to verification of control, avoid dual pledging, and ascertaining values is not easy. Corporate bitcoin holdings have posed some complex audit issues that have not been covered by more conventional methods of accounting and analysis before.
Bitcoin loans get risky when volatility and custody controls tighten. (Image Source: CNBC)
Why Shareholders Sometimes Cheer, And Sometimes Worry
Shareholders will welcome leverage when it increases their gains and is used well by management, as through buying back shares and other high-risk, high-reward investing opportunities. However, on the other hand, leverage can have large amplifications on the downside as well, especially if the bitcoin price plummets, resulting in margin calls that negatively impact bottom lines, potentially through dilution of equity if shares are issued to meet margin calls or could potentially lead small businesses into insolvency. (ng.investing)
Market And Regulatory Indicators That Are Relevant Today
Even in leading markets, regulators are playing catch-up. Disclosure rules and regulations have been region or market-specific, requiring some markets to be transparent about their crypto asset pledges and other risks of a relationship nature, while other markets have more flexibility and don’t need as much rigidity and compliance. But on the other hand, market infrastructure has been evolving for the better, and custody and vault facilities, as well as market-friendly structures for collateralized facilities, have simplified and encouraged larger facilities.
Comparison With MicroStrategy: Similarities And Differences
Though MicroStrategy was making headlines by accumulating bitcoin as a balance sheet asset and sometimes through balance sheet engineering techniques for funding its buying spree, what is new is that there is scale now, and this has been exemplified through firms like Metaplanet, indicating that this model can be applicable for firms of all sizes and backgrounds, and this has been made possible because, through this ecosystem, more participants are available (lenders, custodians, and advisers).
MicroStrategy pioneered this solution with Bitcoinized yield:
Take Bitcoin as collateral, slice it up, and manufacture yield.
Then pay 200-500 basis points more than bonds while being 5x overcollateralized. pic.twitter.com/ALWfU9XfAh
— Market Disruptors (@MDisruptors) November 2, 2025
Actions That Need To Be Undertaken By Businesses Before They Can Pledge BTC
Boards And Treasuries Should
- Conduct scenario modeling, including stress tests on varied price shocks.
- Use institutional custodians that have transparent custody and rehypothecation policies.
- Agree on strict governance and sign-off procedures for loan drawdown and movement of collateral.
- Ensure that auditors and legal counsel have access to proof of reserves and title documentation.
- Wise treasurers hedge bitcoin as just another credit risk on their playbooks, and prepared companies never get a surprise call on their first margin call.
Market Size And Near-Term Outlook (Present-Focused)
Market Size
There has been considerable growth in corporate bitcoin treasuries, and more publicly listed companies have begun including bitcoin on balance sheets, as well as exploring credit facilities. Looking back, it appears that slow growth would be expected, and this would involve more specialized facilities, competitive pricing within defined regulations, and engagement from mainstream finance. Thus, this paradigm unlocks capital and spurs innovation, not for a conversion of corporate treasuries into cryptos, but for a defined application of bitcoin as a tool of an asset class itself.
A Human Story: Why CFOs Sleep Differently Today
CFOs, many of whom came of age in environments that revolved around managing balance sheets of cash and bonds, find that, as a CFO of a digital asset, they have a different beat as they work their balance sheet. Some CFOs feel thrilled about having an additional tool on their tool kit that gives them more control over their shareholders’ returns, while other CFOs stay up all night thinking about flash crashes on digital assets, and all of these events that used to occupy their calendars as they managed their balance sheets as CFOs of larger companies are now occupied, albeit by a different group of technical professionals speaking a different language.
- They can raise funds without having to sell their bitcoin holdings.
- Credit facilities secured by BTC are becoming more available, and covenants and haircuts matter. Governance, custody, and audit transparency are the non-negotiables.
- Recently, Metaplanet made a loan that indicates its success in other countries and firms as well.
Mechanics, Step By Step (Practical, Not Theoretical)
Essentially, bitcoin collateralized lending is just corporate finance, only packaged differently. It is easy to accomplish, but its repercussions require discipline.
Collateral Pledge
The firm transfers some of its bitcoin into an institutional custody service that is collateralized by a loan agreement. Custody can be direct, holding private keys and/or trust arrangements, of which Sygnum and most custodians have adopted as case studies.
Loan Transaction And LTV
Loan value and LTV are agreed by lender and borrower on a loan-to-value (LTV) ratio, i.e., a percentage of value that can be loaned on the collateral. Institutional bitcoin loan LTVs are typically around 40–60%. One common value is a conservative ~50%. Moreover, there is always more risk as one progresses above this value.
Covenants And Triggers
Both parties agree on margin call triggers, cure obligations, and rules about rehypothecating, or reusing, collateral, as well as liquidations. Don’t expect as favorable covenants if the bank is regulated and participating.
Monitoring And Margin Calls
There is monitoring of the market and leverage by lenders. Should BTC fall and if the LTV triggers an acceptable threshold, borrowers have to agree on additional money or a loan repayment or face liquidation. All this is automatic and occurs instantly.
Who Borrows From Public Corporations Today?
There are three ways that this space is bifurcating: crypto native lenders, digital banks or specialized custodians, and banks exploring structured offerings.
Three Ways The Space Is Bifurcating
Crypto Native Borrowers
Crypto native borrowers (Ledn, previous products of Genesis before their restructuring, certain hedge funds, and non-bank lenders) can offer speed and flexible loan structures. They pose a risk of counterparty risk but have intimate familiarity with crypto primitives. Ledn is one example of a scale-up of institutional bitcoin loans.
Digital Asset Banks And Regulated Lenders
Today, digital asset banks and regulated lenders (Sygnum, some Swiss and Singaporean banks) have begun syndicating or underwriting BTC-backed loans for institutional borrowers. Sygnum has completed large-scale syndicated loans and shows that it is possible to obtain regulated credit facilities secured by BTC.
Traditional Custodians And Banks
Traditional custodians and banks (BNY Mellon, State Street, and Clearstream) are increasingly offering custody and associated services that enable large, auditable BTC-secured loan facilities, either through their own offerings or in collaboration with loan providers from the crypto space. Such offerings help ease the worries of the boards of companies. (bny)
Metaplanet’s Reported US$100m Loan
Metaplanet’s reported US$100m loan shows how these participants come together, as follows: first, a public company pledges BTC; then a loan provider provides funds; and finally, institutional custody and legal advice are used as a packaged deal aimed at satisfying auditors and market participants.
Metaplanet’s $100m deal shows firms can borrow securely against bitcoin. (Image Source: Coin Gabbar)
Rehypothecation, Custody, And Counterparty Risk
Two expressions have particular relevance, namely “rehypothecation” and “proof of control.”
Rehypothecation
Rehypothecation is when the lender can actually re-use that same collateral (this could be for their own loan business or trading). Some of these loan providers will never re-hypothecate for their corporate clients, and some may only do this within extremely limited parameters. Rehypothecation increases funding costs, but it can create a risk of counterparty exposure if the lender defaults on payments. (investopedia)
Proof Of Control
Proof of control is how they ascertain that they actually control these wallets and private keys. Traditional auditors have difficulty doing this. Corporate bitcoin treasuries are an “auditor’s nightmare” because of the way each one verifies proof. Auditors could demand proof of control and title from public companies.
Jurisdictions And Which Markets Lead
It is a present-oriented map, because you can enjoy really good facilities there today:
- Switzerland & Singapore: Hotspots for licensed digital banks offering compliant bitcoin credit and custody solutions. These countries offer favorable regulations for cryptocurrencies as well as solid financial licenses.
- USA: Development is underway. Large custodian banks offer custody infrastructure, and specialized loan providers exist, though they are constrained by fragmented regulations and accounting guidance. Mainstream banks are risk-averse but growing more supportive of custody and settlement facilities.
- Europe (Germany & Luxembourg): Infrastructure like Clearstream is growing custodial and settlement facilities for Bitcoin. EU regulations (MiCA) have made this easier from a legal standpoint.
- Canada and Australia: Exemplified by regulated crypto-service providers and loan providers (Ledn is a Canadian-regulated one).
Where custody, regulatory hurdles, and institutional loan providers meet, that’s where you’ll find deep and cheapest pockets.
Top financial hubs are now leading in regulated bitcoin-backed lending. (Image Source: Broadridge)
What Treasury Teams Need To Model (Practical Checklist)
Before pledging BTC, the following should be provided by treasury teams to the board:
- Network Overview.
Stress-testing dashboard. Simulate multi-scenario price shocks (10%, 20%, 30% declines) and corresponding liquidity courses of action for margin calls. Employ conservative haircuts. - Counterparty Matrix.
Details of lenders, custodians, rehypothecation permissions, insurance, insolvency waterfall, and credit substitutes. - Sign-off Plan For Auditors’ Approval.
Proof of reserves, control, and non-double pledges of shares. Address any potential reporting issues beforehand. - Legal And Regulatory Viewpoint.
Seek opinions on all countries where the firm operates. Collateral rules vary by jurisdiction. - Crisis Blueprint.
Prior actionable steps for margin calls: (a) inject funds, (b) move non-core assets, (c) forbearance time-windows. Time is of the essence: act now.
“Boards that view BTC-backed loans as just other structured financings have two advantages: speed and optionality. However, boards that view them as marketing projects are asking for trouble.”
Also Read: Crypto Market Reaction to Inflation Data: How US CPI Figures Could Shake Bitcoin and Altcoins
Market Outlook (What Comes Next, Now)
- Infrastructure: Increasing but still customised. Expect more syndicated, regulated debt secured by BTC at competitive prices when custody and legal structures are available. The Sygnum model of syndicated loans and transactions with regulated counterparties is becoming more typical.
- Auditor Standards: Expect more stringent auditor standards and the establishment of sector-wide audit guidelines and formalised proof-of-reserves reporting structures as regulators call for standards.
- Increased Involvement of Banks: Major custodians and banks expanding their platforms enable larger funding lines and mitigate concentration risk. This is important for public companies that require low-cost, long-term funding.
Conclusion And Relevance Of This Issue For Today’s Investors And Executives
Metaplanet’s draw-off of US$100m is no gimmick. It is a marked indication that corporate finance regards bitcoin as collateral, not merely a speculative trading asset. This changes how treasuries are managed, affects the market value of treasuries, and increases emphasis on transparency by auditors and authorities.
This change achieves two tasks:
- It Enables Optionality. Boards can tap capital markets while retaining upside exposure: powerful if one believes in bitcoin’s long-term fundamentals.
- It Forces Governance Catch-Up. There is genuine benefit only if custody, legal frameworks, auditability, and counterparty risk are solid and that is the present bottleneck.
If you are a CFO, treasurer, or investor, manage BTC-backed credit as you would any large structured credit: stress it mercilessly, require institutional custody, seek simple-language covenants, and think through actions ahead of market moves. Financial engineering can be elegant; it is people’s responsibility to deliver it responsibly.
Frequently Asked Questions (FAQs)
- Q: What is meant by bitcoin as collateral?
A: A firm promises bitcoin to a lender as collateral for funding. When the value of bitcoin declines below certain levels, the lender may require additional collateral or sell the pledged BTC. - Q: Why don’t firms just sell bitcoin and get money that way?
A: Selling crystallises taxable gains and reduces upside exposure. Borrowing maintains market exposure while meeting short-term funding needs. - Q: Who gives out these loans?
A: A combination of crypto native lenders, hedge funds, and increasingly some conventional banks and custodians providing structured financings. - Q: What are the primary risks?
A: Price volatility, rehypothecation, and weak disclosure and audit standards — any one of these can create sudden financial pressures. - Q: Will more companies, like Metaplanet, follow suit?
A: Gradual adoption is expected as regulatory clarity and custodial infrastructure improve. The main constraint is governance and audit readiness, not demand. - Q: Can one avoid capital gains tax by borrowing against bitcoin?
A: In most countries, borrowing is neither a sale nor a taxable transfer, so it can avoid capital gains tax. Tax laws differ by jurisdiction; consult tax counsel. - Q: What conservative LTVs should treasurers consider?
A: Some institutional loan providers set bitcoin LTVs around 50%. Conservative treasurers may opt for 30–40% LTVs. - Q: Who ensures custody?
A: Larger custodians offer insured vault products, though insurance limits and exemptions vary. Verify coverage details and whether it protects against lender distress. - Q: Can non-pledged bitcoin be seized?
A: In well-structured agreements, only the pledged collateral may be seized. Poor documentation or unclear rehypothecation rights can create problems; legal scrutiny is essential. - Q: If BTC falls, will this business lose everything?
A: Not necessarily. Contracts typically include cure periods and market mechanisms. Smaller firms with lower liquidity are more vulnerable to rapid, deep crashes that limit options.
