Despite spending billions of USD to accumulate Bitcoin, a new report from TD Cowen states that Strategy's Bitcoin buying strategy has not significantly impacted BTC prices in the market – a finding that challenges common investor assumptions.



The giant 'buys a lot but doesn't affect the price'


Many have doubted that the continuous net buying by #strategy has supported Bitcoin prices and that if it stops, prices could collapse. However, data from TD Cowen indicates the opposite:



  • Strategy's Bitcoin purchases account for only an average of 3.3% of weekly trading volume.



  • In the last 27 weeks, the total purchase volume accounted for only 8.4% of market volume, mainly due to a few weeks of spikes.



  • There were up to 8 consecutive weeks where Strategy did not buy any BTC, indicating that buying activity is not consistent and does not have a stable impact on prices.



Correlation with price? Almost none


Statistical analyses show that:



  • The correlation coefficient between the amount of $BTC purchased by Strategy and BTC closing prices is only 25% – very low.



  • When compared to weekly price volatility, this figure only slightly increases to 28%.




=> This suggests that Strategy's buying strategy is not strong enough to create an immediate or lasting impact on BTC prices in the market.



Does it exceed the mined BTC amount?


Although Strategy has often purchased more BTC than was mined during the same period, TD Cowen asserts that this does not mean pushing the price.



  • The secondary trading market for BTC is 20 times the newly mined volume.



  • Even excluding Strategy, secondary trading is still 17 times the new supply from miners.



In other words, Strategy is just a small buyer in a huge liquidity market, where both buyers and sellers are 'price takers' – not price makers.



Does not shake the market, but benefits shareholders


Although it does not significantly impact prices, Strategy is still optimizing assets for shareholders:



  • Just in the last quarter, the company's BTC amount increased by 5,281 coins, bringing in nearly 600 million USD in profit.



  • Since the beginning of 2023, Strategy has increased its BTC holdings by over 306%, while diluted shares have only increased by 94%.




With 1.53 billion USD left in stock issuance capacity and support from the board of directors, Strategy can continue executing this strategy without disrupting the BTC market.



Conclusion: Buying more does not necessarily 'support the price'


TD Cowen's report shows that large-scale Bitcoin purchases do not equate to controlling Bitcoin prices, especially as the crypto market becomes increasingly liquid and fragmented. However, as a treasury asset, Bitcoin is proving its true value for businesses that know how to leverage it.



#anhbacong

🔒 Risk warning: Investing in cryptocurrencies always carries significant risks and is not suitable for everyone. Please consider carefully and equip yourself with sufficient knowledge before participating in the market.