NYDIG: Bitcoin Treasury Firms’ Capital Reserves Could Drive Prices Higher

Bitcoin prices could see a significant boost in the near future, thanks to the untapped capital reserves—referred to as “dry powder”—held by public companies with bitcoin on their balance sheets, according to a new analysis from NYDIG.

In its latest report, NYDIG’s global head of research, Greg Cipolaro, points to the growing potential of bitcoin-holding companies using their equity valuations to raise funds, which could then be reinvested into acquiring more bitcoin. This process, according to Cipolaro, could create upward pressure on bitcoin’s price, given the self-reinforcing cycle between capital raising and increased bitcoin purchases.

Cipolaro’s model, which uses a money multiplier effect, estimates that such an influx of capital could push bitcoin’s price up by as much as $42,000 per coin, marking a 44% increase from its current value around $96,000.

This potential market movement is further backed by the growing involvement of companies like Twenty One, a bitcoin-focused investment vehicle backed by Tether, Bitfinex, and Cantor Fitzgerald. These entities are dedicated to acquiring and holding bitcoin, making them significant players in the market with the power to affect bitcoin’s price trajectory.

With public companies holding roughly $69.6 billion in bitcoin, the amount of “dry powder” available to fund further acquisitions is substantial. According to Cipolaro, these companies could use their premium stock valuations to raise capital and increase their bitcoin holdings, thereby creating a feedback loop that could drive prices higher.

“The ability of these firms to raise capital using their equity premiums is a key factor in pushing bitcoin’s price upward,” Cipolaro explains.

Despite the current volatility in broader markets, the growing influence of institutional investors and companies adding bitcoin to their treasuries signals that the cryptocurrency market is evolving, with traditional financial institutions playing a larger role in price discovery and liquidity.