Bitcoin treasury companies having a weaker impact on price than ETFs

Bitcoin ETF flows remain a strong driver of price action, with a high R² of 0.80 explaining around 80% of the variance in 30-day BTC returns, according to K33 Head of Research Vetle Lunde.

However, the surge in bitcoin treasury companies is having a far weaker impact on price, with an R² of 0.18 between 30-day treasury flows and BTC returns, Lunde said.

While firms like Strategy continue to buy bitcoin directly from the market using capital raised through debt or equity, impacting demand, many newer entrants are taking a different approach.

Despite more than 50 new treasury initiatives launching in the past three months alone, many of them are acquiring bitcoin through in-kind share swaps with large holders.

One example is the Softbank-backed Twenty One, which built its 37,230 BTC position by exchanging shares for bitcoin from Tether and Bitfinex.

These in-kind swapping structures generate little to no net market demand for bitcoin, helping explain why treasury flows now have a more muted impact on price than ETF flows, potentially drawing capital away from direct bitcoin purchases, Lunde argued.

"With the massive momentum in bitcoin treasury companies of late, more investors are attracted to this trade and may seek to sell BTC spot to participate in ATM offerings or fund enterprises directly in-kind," he said.