Public companies holding bitcoin may possess a powerful market catalyst in the form of untapped issuance capacity that could drive substantial price increases, according to recent research by NYDIG.
In a report released this week, Greg Cipolaro, NYDIG’s global head of research, highlights the potential impact of what he refers to as “dry powder”—the share issuance capacity available to bitcoin treasury companies. These companies could use their elevated equity valuations to raise new funds, which could then be used to acquire more bitcoin, potentially triggering a major rally in prices.
Cipolaro uses a simple model to estimate the possible effect: applying a 10x “money multiplier,” which historically shows how capital inflows have boosted bitcoin’s market cap, Cipolaro suggests that such activity could drive bitcoin’s price up by $42,000 per coin. This would represent an approximate 44% increase from current levels near $96,000.
The potential for this market shift has grown more pressing following the launch of Twenty One, a bitcoin accumulation vehicle backed by Tether, Bitfinex, and Cantor Fitzgerald. Unlike other firms that incorporate bitcoin into broader business operations, Twenty One is exclusively focused on acquiring and holding bitcoin, already beginning with a substantial position.
Additionally, Cantor Equity Partners, Twenty One’s SPAC partner, has outperformed the S&P 500 by an impressive 347% since the deal announcement.
Currently, 69 public companies collectively hold around $69.6 billion in bitcoin. Cipolaro’s analysis suggests these companies could leverage their current stock premiums over net asset value to fund more bitcoin purchases, creating a self-reinforcing cycle. Essentially, equity issuance could drive bitcoin buying, which would increase both the value of the bitcoin held and the value of the companies’ shares.
“The implication is clear,” Cipolaro concludes. “The issuance capacity in the form of ‘dry powder’ could significantly propel bitcoin’s price.”
Even if these companies do not immediately take action, the growing institutional interest and the strong performance of bitcoin-related stocks indicate a shift in how capital markets are approaching bitcoin exposure—through balance sheets rather than just via ETFs.
