What is the Impact of Michael Saylor's Bitcoin Madness on BTC Price? Analysts Evaluated! Here are the Details

TD Cowen analysts evaluated the strategy’s treasury operations against the Bitcoin trading volume and price movement in the last six months.

TD Cowen Says the Strategy’s Bitcoin Buying Frenzy Has Minimal Impact on Prices

According to a research report prepared by TD Cowen, despite the increasing footprint of a major institutional Bitcoin (BTC) holder, it appears that Strategy’s large-scale cryptocurrency purchases have very little impact on the price.

The published findings challenge a popular theory among skeptics: that Strategy’s aggressive buying frenzy has helped support the value of Bitcoin and that prices would fall without ongoing demand. However, analysts said, based on the data, that this argument does not carry much weight.

A big buyer, but a small slice of the market

Strategy recently issued an additional 1.8 million shares in the market as part of its (ATM) offering, generating an additional $842 million in net income.

The funds were used to purchase 6,556 Bitcoins, bringing the firm’s Bitcoin yield this quarter by 1% to 12.1%. However, when measured against the broader Bitcoin market, these purchases are just a drop in the bucket.

According to TD Cowen’s analysis, Strategy’s Bitcoin purchases typically account for an average of only 3.3% of weekly trading volume. Over the past 27 weeks, the company’s total activity reached 8.4% of the volume.

However, this figure was distorted by a handful of weeks in which purchases exceeded 20% for a short period. During eight of these weeks, Strategy did not purchase any Bitcoin.

TD Cowen analysts wrote, “Our conclusion is that it does not seem reasonable that Strategy’s purchases could have a continuous and significant impact on Bitcoin price in most periods.”