TD Cowen analysts have recently scrutinized Strategy’s impact on the Bitcoin market following its significant buying activities in the cryptocurrency over the last half-year.

Despite pouring billions into Bitcoin, Strategy's purchases have shown minimal influence on BTC prices, as per TD Cowen's latest research. The analysis revealed that Strategy’s acquisitions represented only 3.3% of the weekly trading volume on average, displaying a weak correlation to price fluctuations. Nevertheless, while not significantly affecting markets, Strategy’s approach to managing its treasury has consistently provided substantial shareholder value, with its Bitcoin holdings skyrocketing by 306% since early 2023.

In contrast to a common belief that Strategy's aggressive purchasing was bolstering Bitcoin’s value and that without it, prices would decline, TD Cowen's findings challenge this notion. The data indicates that Strategy's impact on Bitcoin prices is relatively insignificant despite being a major buyer in the market.

Even though Strategy recently sold an additional 1.8 million shares through its at-the-market (ATM) offering, raising $842 million to purchase 6,556 bitcoins and increasing its quarterly Bitcoin yield by 1% to 12.1%, these transactions remain relatively minor within the broader Bitcoin market context.

Strategy’s Bitcoin Buying Spree Has Minimal Impact on Prices, TD Cowen Says

TD Cowen analysts evaluated the Strategy’s treasury activity against bitcoin trading volume and price action over the past six months.

• Despite investing billions into bitcoin, Strategy's purchases have had little to no lasting impact on BTC prices, according to new research from TD Cowen.
• The analysis found Strategy’s bitcoin buys averaged just 3.3% of weekly trading volume, with weak statistical correlation to price movements.
• While not moving markets, Strategy’s treasury strategy continues to deliver strong shareholder value, with bitcoin holdings up 306% since early 2023.

The study found that over the past six months, secondary trading activity has outpaced mining by around 20 times even without considering Strategy’s purchases. This suggests that both miners and buyers are influenced by market dynamics rather than individual actions like those of Strategy.

A Big Buyer, But a Small Slice of the Market

While debates continue about how much influence Strategy truly wields in shaping Bitcoin's trajectory, one thing remains clear — its strategic investment approach has proven immensely profitable for shareholders. With an impressive increase in Bitcoin holdings and a carefully managed treasury strategy, Strategy continues to build value for stakeholders while navigating this volatile market successfully.

According to the TD Cowen analysis, Strategy’s bitcoin buys have typically accounted for just 3.3% of weekly trading volume on average. Over the past 27 weeks, the company’s total activity amounted to 8.4% of volume — but this figure was skewed by a handful of weeks where its buying briefly surged past 20%. In eight of those weeks, Strategy didn’t buy any bitcoin at all.

“Our conclusion is that in most periods, it doesn't appear plausible that Strategy's purchases could have had a sustained, material impact on the price of bitcoin,” TD Cowen analysts wrote.

Correlation? Not Much.

Given a correlation coefficient close to 0 suggests no or weak correlation, these results indicate little to no link between Strategy’s actions and short-term market movements — let alone any kind of sustained price influence, the paper said.

What About Outpacing Miners?

Another common critique is that Strategy frequently purchases more bitcoin than is mined in a given period, implying it’s creating upward price pressure. While technically true, the analysis shows this argument misunderstands how the bitcoin market works.

Over the past six months, secondary bitcoin trading has outpaced mining volume by nearly 20 times. Even removing Strategy’s purchases from the equation, secondary market activity still exceeds new supply by 17 times. In that environment, miners and buyers alike are price takers — not setters.

“As we have seen, its purchases represent a very small percentage of total bitcoin trading volume; thus the idea that it is somehow having a profound or even notable impact on bitcoin price action seems incongruous, to us,” TD Cowen said.

Building Value, Not Hype

While Strategy’s influence on the bitcoin market may be overstated, the value it’s generated for shareholders is harder to ignore.

Last week’s purchases created an estimated incremental gain of 5,281 bitcoins, bringing quarter-to-date gains to nearly $600 million. Since the beginning of 2023, Strategy has increased its bitcoin holdings by 306%, while only expanding its fully diluted share count by 94% — a strong showing for a company using bitcoin as a strategic treasury asset.

With $1.53 billion in remaining ATM capacity and board approval for a larger share authorization, Strategy is well-positioned to continue this strategy — without disrupting the very market it’s betting on.