Recent research by investment firm Keyrock shows that corporate treasuries, despite holding a significant amount of Bitcoin, have minimal impact on its price.
Impact of Treasuries on Bitcoin Price
According to the Keyrock report released on July 10, treasury companies hold 847,000 BTC, which is about 4% of Bitcoin’s total supply. Despite this, their influence on daily price movements is only 0.59%. Leading companies like Strategy control over 1% of the total BTC supply; however, corporate purchases do not significantly impact the market. Most companies tend to hold their Bitcoin long-term and seldom adjust their positions.
Premiums on Stocks of Companies Holding Bitcoin
Companies with large Bitcoin reserves typically trade at prices significantly above the value of their BTC assets. For instance, MicroStrategy trades at a premium of 91.3%. Other treasury firms show premiums ranging from 20% to 60%, indicating an independent response of stock prices to market sentiment. These premiums fluctuate with market cycles, narrowing during downturns and widening during price increases.
Limitations of Bitcoin Use in Treasuries
Most Bitcoin held by treasury companies is not used as collateral or in other financial products. The majority of holdings remain offline and are not involved in lending or yield-generation strategies. Limited use of assets means that while treasuries hold large volumes, they do not generate liquidity or returns. The report notes that unless these firms adapt, they may lose competitiveness as treasury growth without active use may not be the most effective way to maximize resources.
Overall, the findings of this study emphasize that corporate treasuries, despite their scale, do not have a significant effect on short-term Bitcoin price movements. The interplay between stock prices and the underlying asset value remains a crucial consideration for investors.
