VanEck’s Matthew Sigel has analyzed the impact of Strategy’s Bitcoin purchases amid an impressive recovery push by the crypto firstborn.
As Bitcoin surges past the $90,000 mark for the first time in over a month, market watchers again question the impact of Strategy’s relentless buying on BTC price action. However, fresh insights from VanEck’s Head of Digital Assets Research, Matthew Sigel, suggest that fears of market manipulation or artificial price inflation may be overstated.
How does Strategy’s Bitcoin Buys Impact Price?
According to Sigel, who cited data from investment bank TD Cowen, Strategy’s (formerly MicroStrategy) weekly Bitcoin purchases account for only a small fraction of overall market activity.
On average, the company contributes around 8.4% of total weekly buy volume, although this number is skewed by a few exceptionally high-volume weeks. In most cases, its market share stays in the low single digits, around 3.3%, and there are multiple weeks when the firm does not buy any Bitcoin.
Notably, statistical data support the idea that Strategy’s influence on price trends is minimal. Sigel found only a weak correlation, about 25%, between the company’s Bitcoin buying volume and BTC’s weekly closing price.
In addition, the correlation with price changes over the course of a week is similarly low at 28%. These figures suggest that the firm’s activity does not have a meaningful or predictable effect on Bitcoin’s short-term price behavior.
Meanwhile, Sigel also addressed concerns about the new Bitcoin supply from miners. His research shows that Bitcoin’s secondary market trading volume massively outweighs mining outputs, making miners less influential in setting prices.
Even when considering MicroStrategy’s purchases, secondary market activity remains roughly 17 times greater than total new supply, confirming the view that major institutional buys like MicroStrategy’s do not distort the overall market.
Bitcoin Reclaims $90K Shortly After Strategy’s Announcement
The timing of this analysis is especially relevant, coming just after Strategy’s latest acquisition. Yesterday, on April 21, the firm disclosed the purchase of 6,556 BTC between April 14 and April 20, at an average price of $84,785 per coin.
The acquisition, totaling about $555.8 million, brings the company’s total holdings to 538,200 BTC. With this addition, Strategy now holds nearly 2.5% of all existing Bitcoin, procured at an average cost of $66,384 per coin.
Following this announcement, Bitcoin’s price experienced a significant uptick, reclaiming the $90,000 level and climbing to $90,718. Interestingly, the asset is up 3.78% today after a 3% rally yesterday.
The surge has revived discussions around whether Strategy’s purchases had directly influenced the price bounce. Yet, as Sigel’s data-driven commentary suggests, broader market conditions and investor sentiment likely had a larger impact than a single firm’s actions.
For context, critics like economist and gold advocate Peter Schiff have championed this narrative. Schiff has long argued that Strategy’s aggressive Bitcoin accumulation artificially inflates prices. In particular, he suggested this in June 2021.
This #Bitcoin rally is a gift to sellers from @michael_saylor. #MicroStrategy is paying 6.125% to borrow $500 million for 7 years to buy more Bitcoin. Traders are front-running this trade, buying now to sell later to MSTR at higher prices. Once MSTR is filled Bitcoin should tank.
— Peter Schiff (@PeterSchiff) June 9, 2021
He accuses the firm of creating unsustainable price rallies and warns that its strategy, heavily funded through debt and equity dilution, could lead to financial disaster if Bitcoin’s value drops. Schiff has also labeled the company’s actions as bordering on market manipulation.
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