{"id":23049,"date":"2025-04-21T16:46:48","date_gmt":"2025-04-21T16:46:48","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=23049"},"modified":"2025-04-21T16:46:48","modified_gmt":"2025-04-21T16:46:48","slug":"strategys-bitcoin-buying-spree-has-minimal-impact-on-prices-td-cowen-says","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=23049","title":{"rendered":"Strategy\u2019s Bitcoin Buying Spree Has Minimal Impact on Prices, TD Cowen Says"},"content":{"rendered":"
\n

Despite its growing footprint as a major corporate holder of bitcoin (BTC), Strategy\u2019s large-scale purchases of the cryptocurrency appear to have little, if any, influence on its price, according to a research paper by TD Cowen.<\/p>\n

The findings published Monday challenge a popular theory among skeptics \u2014 that Strategy\u2019s aggressive buying spree is helping prop up bitcoin\u2019s value, and that without its continued demand, prices would falter. But based on the data, that argument doesn\u2019t hold much weight, the analysts said.<\/p>\n

A Big Buyer, But a Small Slice of the Market<\/strong><\/h3>\n

Strategy recently issued another 1.8 million shares under its at-the-market (ATM) offering, raising an additional $842 million in net proceeds. The funds were used to purchase 6,556 bitcoins, boosting the firm\u2019s bitcoin yield this quarter by 1% to 12.1%. However, when measured against the broader bitcoin market, these purchases are just a drop in the bucket.<\/p>\n

According to the TD Cowen analysis, Strategy\u2019s bitcoin buys have typically accounted for just 3.3% of weekly trading volume on average. Over the past 27 weeks, the company\u2019s total activity amounted to 8.4% of volume \u2014 but this figure was skewed by a handful of weeks where its buying briefly surged past 20%. In eight of those weeks, Strategy didn\u2019t buy any bitcoin at all.<\/p>\n<\/p>\n

\u201cOur conclusion is that in most periods, it doesn’t appear plausible that Strategy’s purchases could have had a sustained, material impact on the price of bitcoin,\u201d TD Cowen analysts wrote.<\/p>\n

Correlation? Not Much.<\/strong><\/h3>\n

The analysis further tested the relationship between Strategy\u2019s bitcoin purchases and market prices \u2014 and found it to be statistically weak. The correlation coefficient between Strategy\u2019s weekly bitcoin buy volume and BTC price at week\u2019s end came in at just 25%. When comparing purchases to weekly price changes, the correlation rose only slightly to 28%.<\/p>\n

Given a correlation coefficient close to 0 suggests no or weak correlation, these results indicate little to no link between Strategy\u2019s actions and short-term market movements \u2014 let alone any kind of sustained price influence, the paper said.<\/p>\n

What About Outpacing Miners?<\/strong><\/h3>\n

Another common critique is that Strategy frequently purchases more bitcoin than is mined in a given period, implying it\u2019s creating upward price pressure. While technically true, the analysis shows this argument misunderstands how the bitcoin market works.<\/p>\n

Over the past six months, secondary bitcoin trading has outpaced mining volume by nearly 20 times. Even removing Strategy\u2019s purchases from the equation, secondary market activity still exceeds new supply by 17 times. In that environment, miners and buyers alike are price takers \u2014 not setters.<\/p>\n<\/p>\n

\u201cAs we have seen, its purchases represent a very small percentage of total bitcoin trading volume; thus the idea that it is somehow having a profound or even notable impact on bitcoin price action seems incongruous, to us,\u201d TD Cowen said.<\/p>\n

Building Value, Not Hype<\/strong><\/h3>\n

While Strategy\u2019s influence on the bitcoin market may be overstated, the value it\u2019s generated for shareholders is harder to ignore.<\/p>\n

Last week\u2019s purchases created an estimated incremental gain of 5,281 bitcoins, bringing quarter-to-date gains to nearly $600 million. Since the beginning of 2023, Strategy has increased its bitcoin holdings by 306%, while only expanding its fully diluted share count by 94% \u2014 a strong showing for a company using bitcoin as a strategic treasury asset.<\/p>\n

With $1.53 billion in remaining ATM capacity and board approval for a larger share authorization, Strategy is well-positioned to continue this strategy \u2014 without disrupting the very market it\u2019s betting on.<\/p>\n

\u201cWe expect Strategy will continue to drive positive BTC Yield for the foreseeable future. While BTC Yield will likely fall to the extent bitcoin continues to rise in price, the dollar value of incremental gains from Strategy’s Treasury Operations could remain highly advantageous to shareholders,\u201d the analysts wrote.<\/p>\n

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk\u2019s full AI Policy.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Despite its growing footprint as a major corporate holder of bitcoin (BTC), Strategy\u2019s large-scale purchases of the cryptocurrency appear to have little, if any, influence on its price, according to a research paper by TD Cowen. The findings published Monday challenge a popular theory among skeptics \u2014 that Strategy\u2019s aggressive buying spree is helping prop […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-23049","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/23049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23049"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/23049\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}