Can Metaplanet use financing from the “king of the Tokyo death spiral” to buy Bitcoin—only to keep itself alive with EVO before Bitcoin rises?

Bloomberg’s feature, titled “king of the Tokyo death spiral,” reports on U.S. investor Michael Lerch and the EVO fund he leads. By issuing floating strike warrants, the EVO fund provides crucial liquidity to small and midsized companies facing financial challenges. The most representative case is the Japan version of MicroStrategy, Metaplanet, which uses this financing mechanism to comprehensively redirect the company’s strategy toward Bitcoin asset reserves. This article objectively dissects Lerch’s market operation model, the operating mechanism of the warrants, and their real-world impact on corporate transformation.

The market positioning of “king of the Tokyo death spiral” Michael Lerch and the EVO fund

According to Bloomberg’s reporting, after U.S. investor Michael Lerch entered Japan’s financial industry in the 1990s, he leveraged deep experience in arbitrage trades to build a financial blueprint centered on the EVO fund. The fund focuses on providing capital to micro-cap companies that have difficulty obtaining loans through traditional banking channels. In Tokyo’s financial circles, opinions on Lerch are sharply divided. Some view him as an important liquidity provider for companies facing delisting risk; others point out that the financing tools he leads are often accompanied by severe equity dilution, hence the label “king of the Tokyo death spiral.”

Data show that in 2025, the EVO fund participated in issuing floating strike warrants in Japan for more than 80% of the market. The agreed amount surpassed 1 trillion yen ( about $6.3 billion), establishing its dominant position in this niche market. This trend continued into 2026—as indicated on the fund’s website—Evo has signed equity financing agreements with at least 10 Japanese companies so far this year.

Lerch, now in his 50s, has developed EVO into a family office whose operations span Los Angeles, Hong Kong, and the well-known North Shore area of Hawaii; the group has about 55 employees.

EVO’s arbitrage trading style built on precision

Lerch’s approach in the Japanese market is known for high risk tolerance and precise execution. Its financing business is best known for warrants, but it also offers convertible bonds and other financial instruments, all built on Lerch’s decades of arbitrage experience. The EVO fund attracts companies with urgent need for cash by offering highly competitive terms (such as waiving the strike price discount fee). However, its commercial negotiations and subsequent operations are extremely forceful and follow a strict spirit of contract; it is not without a track record of legal actions against defaulting clients. In practice, EVO uses hedging mechanisms such as stock lending to conduct “arbitrage trades.” After exercising the warrants for new shares, it sells them quickly in the secondary market to lock in profits amid stock price volatility. For example, if a company’s current stock price is 400 yen and its future strike price is 350 yen, the fund can first borrow shares to sell them in the market, locking in a profit of 50 yen (of course, it also has to deduct the related costs). This pragmatic capital-operations model driven by arbitrage helps ensure that the fund’s returns are not absolutely affected by the client company’s long-term fundamentals.

How floating strike warrants work

Since the early 2000s, when Japan emerged from the stagnation after the bursting of the asset bubble, “floating strike warrants”(Moving strike warrants) have been an important component of Japan’s stock capital market. These warrants give the holder the right to buy company shares at a specified price in the future, and that price varies over time. The so-called exercise price is typically set as the previous day’s closing price. This structure provides a fast and flexible channel of capital injection for companies with tight finances. However, when market trends move downward, the strike price keeps getting reduced. Since the financing amount is fixed, the issuer must issue a larger number of new shares to meet the conversion demand. This leads to a rapid increase in the number of outstanding shares, creating a significant “equity dilution effect” for existing shareholders and putting corporate capital efficiency under intense strain.

The symbiotic financing structure between EVO and Metaplanet

The most widely known recent development for the EVO fund is its partnership with Japan’s MicroStrategy counterpart, Metaplanet. According to Metaplanet’s CEO Simon Gerovich, Evo’s “excellent” deal terms make it the most attractive warrants partner in Japan. After the pandemic forced it to close most of its hotels, Metaplanet reached a warrants agreement with Evo at the start of 2025 to raise funds to buy Bitcoin. Metaplane t issues multiple rounds of warrants to EVO to obtain large sums of capital. EVO plays the role of a source of funding, committing to honor the warrants quickly under certain conditions; Metaplanet then uses the raised funds to buy Bitcoin, becoming the Asian listed company with the most Bitcoin.

Metaplanet uses the protective terms in the warrants—its lowest mNAV ( as well as the ratio of the current share price to the value of the Bitcoin it holds)—to ensure a floor price for issuance in order to protect the rights and interests of existing shareholders. The two sides further accelerate EVO’s hedging and capital injection process through stock-lending agreements with major shareholders. This partnership enables Metaplanet to raise more than 120k yen in a short time, but it also tightly links the speed of corporate capital expansion to EVO’s arbitrage trading cadence.

Metaplanet’s operating and financial objectives after transforming into a Bitcoin reserve company

Metaplanet’s current operating model has fully shifted into a treasury reserve strategy centered on Bitcoin. The company will use funds raised through warrants to purchase large amounts of Bitcoin, and it uses “Bitcoin per share”(BTC per share) as a core financial metric. Its “value-appreciation financing” logic argues that as long as the growth rate of purchased digital assets is greater than the growth rate of the number of shares increased by warrant exercise, the overall asset value is meaningfully enhanced. According to Metaplanet’s latest report, its Bitcoin per share increased from 0.000619 in 2024 Q2 to 0.024049 in 2025 Q4; the quarter-over-quarter growth rates range from 11.9%~309%.

In addition, the company has established a Bitcoin income generation business. By selling options, it collects premiums, and from time to time also uses roll-up transactions to increase the strike price and boost Bitcoin premium income. Metaplanet calls this “target buys,” emphasizing it as another way to acquire Bitcoin and generating stable cash flow through option premium income.

(Metaplanet earns revenue from Bitcoin option premiums—what hidden risks does this carry? )

Metaplanet’s stock price has fallen 80% from its peak; before Bitcoin rose, could it only be kept alive by EVO?

But after Metaplanet hit a high of 1,895 in June last year, its stock price has continued to slide. In particular, as the price of Bitcoin has dropped from a high of 120k to 70k dollars, these digital-asset financial companies (DAT) have struggled to raise funds to buy Bitcoin. As can be seen from the chart above, Metaplanet’s pace of buying Bitcoin slowed significantly starting in the second half of last year. This shows that such a model can deliver powerful capital leverage effects in a Bitcoin bull market, but at the same time it deeply ties the company’s intrinsic value to highly volatile assets, increasing operational uncertainty. If Bitcoin’s price cannot be boosted in line with the trend, Metaplanet will likely have to continue relying on EVO’s funding.

This article “Metaplanet: Can it use financing from the ‘king of the Tokyo death spiral’ to buy Bitcoin—only to keep itself alive with EVO before Bitcoin rises?” first appeared on Chain News ABMedia.