Bitcoin treasury 2.0: Derivatives replace 'hodling' as the new playbook

Bitcoin's price recently surged in a short period, recovering the $80,000 level, but the preceding year had been marked by a prolonged downturn. That environment threw into sharp relief the diverging capital strategies of two bitcoin treasury companies. Strategy, the world's largest corporate bitcoin holder, sold $430 million worth of bitcoin this year to fund preferred stock dividends and redemptions. Metaplanet of Japan, by contrast, bought roughly 7,900 additional bitcoin worth $623 million over the same period.

Metaplanet was a small Tokyo hotel operator before it pivoted to a treasury model by purchasing bitcoin in April 2024. By the end of that year it had established a dedicated "Bitcoin Income" division and begun running a cash-secured options strategy within a separate portfolio.

The mechanics work as follows. The company sells cash-secured put options with strike prices below the current market price. If bitcoin stays above the strike price, the options expire worthless and Metaplanet pockets the premium. If the price falls and the options are exercised, the company acquires bitcoin at the agreed strike price — but the premium it already collected effectively lowers its cost basis.

In practice, Metaplanet bought 2,823 bitcoin in the second quarter at an average price of $78,872 per coin. Subtracting the options premium from the total acquisition cost brings the effective cost basis down to roughly $75,032 per coin — a saving of about $3,800 per coin. The company expects the Bitcoin Income division to generate the bulk of its sales for the full year. It has also recently acquired a Japanese securities firm to develop bitcoin-linked bonds and related financial products.

Derivatives are not the only way to put bitcoin to work as a managed asset. Lending virtual assets for interest income is another avenue. Marathon Holdings had 9,377 bitcoin out on loan as of the end of last year, generating annual lending interest income of roughly $32.1 million. Lending does carry counterparty risk, however — if a borrower runs into repayment difficulties, the lender may be unable to recover its assets. To mitigate this, institutional players are building lending structures that require over-collateralization and rigorous borrower screening.

Sophisticated institutional frameworks are essential if these virtual asset strategies are to take root in the broader market. Japan's regulatory environment was itself a key enabler of Metaplanet's active options program. Following a 2019 legislative amendment, Japan brought virtual asset derivatives under the Financial Instruments and Exchange Act starting in 2020. It also eased the year-end mark-to-market tax burden on virtual assets held by companies that meet certain criteria.

South Korea has taken a more cautious path, prioritizing market stability and investor protection. Virtual assets are not recognized as underlying assets for derivatives, and strict standards govern the use of corporate accounts for virtual asset transactions. A comprehensive regulatory framework covering corporate virtual asset lending, collateralization and derivatives remains a work in progress.

That caution has served as a buffer against risk in a volatile market. However, as the global benchmark for treasury companies shifts from "how much do you hold" to "how sophisticated is your management," South Korea should accelerate its own systematic regulatory discussions. A clear risk management and disclosure regime must be established — one that gives companies the institutional foundation to choose their own virtual asset holding and management strategies.