Bitcoin Treasury Firms’ Untapped Resources May Significantly Elevate Prices: Insights from NYDIG

Key Points:

• NYDIG’s Greg Cipolaro indicates that companies holding bitcoin have significant “dry powder” in the form of potential share issuance which could significantly increase bitcoin’s price.
• Cipolaro’s analysis reveals that utilizing this capital to procure additional bitcoin might escalate prices by $42,000.
• The rise of specialized firms such as Twenty One underscores the potential for market enthusiasm to amplify this effect.

Bitcoin-holding public companies may possess a formidable market catalyst: substantial untapped issuance capacity that could drive significant increases in bitcoin’s (BTC) price, as highlighted in recent research from NYDIG.

In a newly released report, Greg Cipolaro, NYDIG’s global research lead, refers to the vast potential for share issuance among bitcoin treasury companies. If these companies capitalize on their favorable equity valuations to raise new funds for bitcoin purchases, it could activate a dramatic positive shift in the market.

Cipolaro’s rough estimates project that employing a 10x “money multiplier” — a historical reflection of how capital influxes typically impact bitcoin’s market capitalization — could lead to a potential price surge of $42,000 per coin. This would reflect about a 44% increase from current figures hovering around $96,000.

The urgency of this market dynamic has intensified with the establishment of Twenty One, a dedicated vehicle for bitcoin accumulation, supported by Tether, Bitfinex, and Cantor Fitzgerald. Unlike other companies that have integrated bitcoin into broader operations, Twenty One is solely focused on acquiring and holding bitcoin, beginning its journey with a significant BTC stake.

Its SPAC partner, Cantor Equity Partners, has surpassed the S&P 500 by over 347% since their agreement.

In total, 69 public companies currently possess around $69.6 billion worth of bitcoin. Cipolaro’s investigation suggests that their stock premiums beyond net asset value could facilitate further acquisitions — effectively establishing a cycle where equity issuance drives BTC purchases, thereby increasing the value of both the bitcoin and the company’s shares.

The implication is clear, states Cipolaro: This “dry powder” from issuance capacity could have a considerable upward impact on bitcoin’s price.

Despite uncertainty over whether these companies will take action, growing institutional interest and the success of bitcoin-focused equities indicate a shifting perspective in capital markets towards bitcoin exposure via balance sheets rather than through traditional ETF flows.

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