Strategy’s recent bitcoin buying spree has had a negligible impact on market sentiment, with its purchases accounting for just 3.3% of weekly trading volume on average.
Strategy’s Bitcoin Buying Spree Has Minimal Impact on Prices
TD Cowen analysts evaluated the Strategy’s treasury activity against bitcoin trading volume and price action over the past six months.
A business strategy is a comprehensive plan that outlines an organization's goals, objectives, and actions to achieve them.
It involves analyzing internal and external factors, identifying opportunities and threats, and developing a competitive advantage.
Effective strategies consider market trends, customer needs, and resource allocation.
They also prioritize innovation, risk management, and continuous improvement.
A Big Buyer, But a Small Slice of the Market
Strategy recently issued another 1.8 million shares under its at-the-market (ATM) offering, raising an additional $842 million in net proceeds. The funds were used to purchase 6,556 bitcoins, boosting 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 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.
Correlation? Not Much
The analysis further tested the relationship between Strategy’s bitcoin purchases and market prices — and found it to be statistically weak. The correlation coefficient between Strategy’s weekly bitcoin buy volume and BTC price at week’s end came in at just 25%. When comparing purchases to weekly price changes, the correlation rose only slightly to 28%.
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.
