TD Cowen: Strategy’s Bitcoin Buying Spree Has Little Effect on Market Prices
Despite making headlines as the largest corporate holder of bitcoin, Strategy’s aggressive accumulation of BTC appears to have minimal impact on broader market prices, according to a detailed study by TD Cowen published on Monday.
Big Buys, Small Ripple
Over the past six months, Strategy’s bitcoin purchases have been substantial — including its latest $842 million acquisition of 6,556 BTC through an at-the-market (ATM) stock offering. Yet, when viewed in context, these buys represent only a fraction of the market.
TD Cowen’s research found that Strategy’s activity accounted for an average of just 3.3% of total weekly BTC trading volume, with its overall contribution over the 27-week period landing at 8.4%. Notably, this average was skewed by a few high-volume weeks, while in others, Strategy made no purchases at all.
Low Correlation, Low Impact
The study also measured how closely Strategy’s buying behavior aligned with BTC’s price action — and the correlation was weak. Analysts found only a 25% correlation between weekly purchase volumes and bitcoin’s closing price, and a 28% correlation with weekly price changes.
“Such low correlation figures suggest that Strategy’s trades are not meaningfully influencing short-term or long-term price trends,” TD Cowen stated.
The Mining Mismatch Myth
One commonly cited argument is that Strategy frequently buys more bitcoin than is being mined, which could create upward pressure on prices. But Cowen analysts say that oversimplifies how the bitcoin market functions. With trading volumes exceeding mining output by a factor of nearly 20, new coins make up only a small piece of the liquidity puzzle.
“In this context, Strategy’s activity is a drop in the ocean,” the report noted. “The vast secondary market dwarfs new issuance.”
Strategic Gains Still Delivering
Though Strategy may not be moving the market, its approach is delivering results for shareholders. Recent activity has contributed to an estimated $600 million in quarterly gains, with BTC holdings rising 306% since the start of 2023 — outpacing a 94% increase in diluted share count.
The firm also retains $1.53 billion in unused ATM capacity and board approval for further issuance, giving it room to continue accumulating BTC without pressuring the market.
“Strategy appears well-positioned to generate long-term value from its bitcoin-focused treasury model — without creating the price dependency some have assumed,” TD Cowen concluded.
