The strategy of publicly traded companies purchasing bitcoin to hold on their balance sheets, popularized by Michael Saylor, has gained significant traction. This shift has not only boosted the companies’ stock prices but could also have major implications for the future of bitcoin’s price.
According to research by NYDIG, the growing trend of corporate bitcoin acquisition is likely to create substantial buy pressure on the cryptocurrency. NYDIG’s analysis used a 10x “money multiplier”, a rule of thumb that reflects how new capital impacts bitcoin’s market cap. Applying this method, the research suggests that each new purchase could potentially increase bitcoin’s price by nearly $42,000.
To arrive at this estimate, NYDIG analyzed companies such as Strategy (MSTR), Metaplanet (3350), Twenty One (CEP), and Semler Scientific (SMLR), evaluating their cumulative equity valuation since adopting the bitcoin acquisition strategy. By analyzing how much capital these firms could raise through stock issuance at current prices to purchase more bitcoin, the researchers projected a significant price increase.
If these projections hold, bitcoin’s price could see an almost 44% increase from its current level of $96,000. This increase would be particularly attractive to Wall Street money managers, especially given the ongoing market volatility and uncertainty.
The research further highlights that publicly traded companies already control 3.63% of the total bitcoin supply, with the majority of those coins held by Strategy. When accounting for private company and government holdings, the total supply controlled by such entities reaches 7.48%, according to data from BitcoinTreasuries.
Additionally, the demand for bitcoin could grow even further if the U.S. government explores “budget-neutral strategies” for acquiring additional bitcoin to add to its strategic reserve.
In conclusion, the increasing accumulation of bitcoin by publicly traded companies, combined with the cryptocurrency’s limited supply, could exert significant upward pressure on its price in the coming years.
