According to a new NYDIG study, public companies holding Bitcoin may be sitting in an undeveloped issuing ability that could significantly raise the price of a strong market catalyst: Bitcoin (BTC).
In a report released this week, Greg Chipolalo, the company’s global research director, points out “dried powder” in a form that could be issued by the Bitcoin Treasury. If these companies use their high stock valuations to raise new funds and buy more Bitcoin, they could trigger a significant upward movement in the market.
Cipolaro uses the rear model of the envelope to estimate the effects. Apply a 10x “money multiplier”. This is a historical rule in which capital inflows historically influenced Bitcoin’s market capitalization. This would bring about a jump of about 44% from the current level to $96,000.
The Market Dynamic has gained new urgency after the launch of the Twenty One, a Bitcoin accumulation vehicle backed by Tether, Bitfinex and Cantor Fitzgerald. Unlike other companies that folded Bitcoin into a broader business model, 21 exists solely to acquire and hold Bitcoin, already seeded in a considerable BTC position.
SPAC partner Cantor Equity Partners has surpassed the S&P 500 by more than 347% since the deal was announced.
Across the sector, 69 public companies hold approximately $69.6 billion worth of Bitcoin. Cipolaro’s analysis suggests that the current stock premium on net asset value can fund more purchases. This effectively creates stock issuance fuel BTC purchases that increase the value of both Bitcoin and issuer shares.
“The implications are clear,” writes Chipolalo. “This ‘dry powder’ in the form of issuance capabilities can have a major impact on Bitcoin prices. ”
Whether these companies are triggering or not, the growing interest from institutions, and the performance of Bitcoin Forward Stocks shows a shift in the way capital markets approach Bitcoin exposure through balance sheets rather than just ETF flows.
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