The growing reserves of bitcoin held by public companies could be a major driver of price increases for the cryptocurrency, according to recent findings from NYDIG.
In its latest research, Greg Cipolaro, global head of research at NYDIG, explains how bitcoin treasury firms—companies with substantial bitcoin holdings—could use their equity valuations to raise capital. This capital could then be reinvested into acquiring additional bitcoin, creating significant upward pressure on prices.
Using a model based on historical capital inflows, Cipolaro estimates that such activity could push bitcoin’s price up by as much as $42,000, representing a 44% increase from its current value of approximately $96,000. He notes that this cycle of raising capital to acquire more bitcoin could lead to a self-reinforcing loop that further elevates bitcoin’s market value.
The report highlights the growing involvement of companies like Twenty One, a bitcoin-focused investment vehicle backed by Tether, Bitfinex, and Cantor Fitzgerald. This project focuses exclusively on bitcoin accumulation, and its emergence reflects an increasing trend among firms to treat bitcoin as a long-term strategic asset.
Currently, 69 public companies hold roughly $69.6 billion in bitcoin. With these companies sitting on substantial “dry powder,” Cipolaro suggests they could leverage their stock premiums to raise funds for more bitcoin purchases, boosting prices in the process.
“The potential for bitcoin-holding companies to use their equity valuations to acquire more bitcoin is a key factor in driving prices higher,” Cipolaro concludes, underscoring the importance of corporate balance sheets in shaping the future of bitcoin markets.
As more companies look to bitcoin as an asset class, the amount of capital available to fuel price increases will likely continue to grow, providing significant support for the cryptocurrency’s market value.
