The Japanese Bitcoin (BTC) investment behemoth Metaplanet has sold 233 BTC Put Options, gaining 23.97 BTC as profits. According to the firm, the 233 Options it sold are worth $62,000, which is set to expire on December 27.

In addition, the contracts are backed by the company’s $13.8 million proceeds from its 11th stock purchase rights event.

Why is Metaplanet Utilizing Put Options?

A put option is a financial instrument that gives the holder the right, but not the responsibility, to sell a specific stock or asset within a given time frame at a predetermined price, called the strike price. Options trading has grown in popularity in relation to Bitcoin and other cryptocurrencies due to the volatility of these assets, presenting profit-making and loss-hedging opportunities.

As a key participant in the crypto market, Metaplanet is leveraging this tactic by signing a put option contract. The company increased its Bitcoin holdings after earning premiums totaling 23.97 BTC through these contracts.

With the acquisition, the company’s total Bitcoin reserves are now 530.72 BTC, or about ¥4.965 billion (roughly $33.8 million).

Metaplanet’s Partnership with QCP Capital

Metaplanet has also partnered with QCP Capital, a digital asset trading company situated in Singapore. This partnership is a strategy that involves selling options, which keeps the company’s long-term investment in Bitcoin intact by allowing it to earn premiums without selling its BTC holdings.

This method enhances Metaplanet’s financial stability and strengthens its Bitcoin holdings. The business can retain its exposure to the asset while also maintaining its balance sheet by amassing Bitcoin through a mix of direct purchases and revenue-generating techniques.

Long-term profitability depends on this dual strategy, which also shows the company’s dedication to upholding a solid financial base. Simon Gerovich, CEO of Metaplanet, stressed that the strategy is in line with the company’s long-term objectives of optimizing its exposure to Bitcoin.

While the majority of the company’s assets remain in Bitcoin, Gerovich highlighted the importance of using some of these holdings in options strategies to generate additional income. By using this strategy, Metaplanet can increase its Bitcoin reserves without having to rely entirely on buying more of the coin, which can be an expensive undertaking in a market where prices fluctuate frequently.

Franklin Templeton’s ETF Proposal

Meanwhile, Franklin Templeton has submitted a proposal to the US Securities and Exchange Commission (SEC) to launch a Bitcoin and Ethereum index exchange-traded fund (ETF). If authorized, this ETF would be the first of its kind to provide exposure to Ethereum as well as Bitcoin, making it stand out as a unique asset in the market for digital currency ETFs.

The Franklin Crypto Index ETF, which is the proposed name for the exchange-traded fund, is designed to give investors sheltered exposure to these popular cryptocurrencies. The fund’s value would be determined by the net asset value (NAV) of the cryptocurrencies it holds, in contrast to holding BTC directly.

Notably, the Franklin Crypto Index ETF will not directly participate in staking or other income-generating activities involving digital assets, unlike other funds. Instead, it will focus on holding Bitcoin, Ethereum, cash, and short-term financial instruments with maturities of less than three months.

This cautious approach is in line with the goal of providing a less risky and safer entry point into the market for digital assets.

Regulatory Considerations

The SEC’s evaluation of anti-fraud measures and the integrity of regulated futures markets will play a significant role in the pending ETF’s approval. The chance for fraud and market manipulation is partly the reason the SEC has historically been hesitant to approve cryptocurrency exchange-traded funds (ETFs).

Additionally, the plan highlights its supervision agreements with regulated futures markets, which guarantee the safe and open trading of the underlying assets. If the SEC approves this ETF, it will mark a significant milestone for institutional investors seeking to diversify their portfolios with digital assets.

Further reassurance regarding the security and supervision of the fund’s operations is offered by Coinbase Custody, which will handle the digital assets, while BNY Mellon will be the fund’s custodian.

These collaborations between digital asset custodians and traditional financial institutions point to the increasing integration of decentralized finance (DeFi) and traditional finance (TradFi) systems. Franklin Templeton’s proposal follows its recent launch of the Franklin Onchain US Government Money Fund (FOBXX) on Aptos (a leading Layer-1 blockchain).

Thanks to this initiative, institutional investors can now access the asset directly from their digital wallets through the company’s blockchain-integrated platform. Furthermore, the firm is also active on other blockchains, such as Avalanche, Polygon, Stellar, and Arbitrum, demonstrating its dedication to growing its footprint in the blockchain industry.