Chart of the Week: Bitcoin's "10x Capital Growth Effect", Will it Sweep Wall Street | CoinDesk JAPAN

• Michael Saylor’s strategy of incorporating Bitcoin into the balance sheet has significantly boosted the stock prices and the value of shareholder assets of many public companies.
• NYDIG Research points out that given the current market environment, the “10x leverage effect” could lead to a price increase of approximately $42,000 per Bitcoin.
• If this is realized, it will represent a 44% increase from the current Bitcoin price, highlighting the potential for corporate Bitcoin purchases.

Michael Saylor’s strategy of incorporating Bitcoin (BTC) into the balance sheet (i.e., companies holding Bitcoin) is spreading among many publicly traded companies and significantly boosting stock prices and shareholder asset values.

So, how will this strategy affect the future of Bitcoin prices? NYDIG Research’s analysis yielded surprising results.

“A 10-fold ‘capital doubling effect’ - the impact of newly injected funds on Bitcoin’s market capitalization is ten times the amount invested, according to the empirical rule - when applied and divided by Bitcoin’s total supply, a rough estimate of the potential price impact is obtained. The result is an increase of about $42,000 per Bitcoin,” NYDIG stated in a research report.

〈NYDIG Research〉NYDIG’s analysts analyzed the cumulative stock valuation after adopting Bitcoin purchase strategies by Strategy, Metaplanet, Twenty One, and Semler Scientific. Furthermore, they derived an estimate of the theoretically available funds that could be raised to purchase additional Bitcoin by issuing stocks at the current stock price.

If this analysis comes to fruition, the predicted price of Bitcoin is expected to increase by about 44% from the current market price of approximately $96,000. In the current market environment, where volatility and uncertainty persist, Wall Street asset management firms may be eager to present this profit and loss chart to their clients.

“The meaning is clear. In other words, the fundraising capability known as ‘dry powder’ has the potential to exert significant upward pressure on Bitcoin prices,” pointed out NYDIG Research.

The supply limit of Bitcoin also supports this analysis. Publicly listed companies already hold 3.63% of the total supply of Bitcoin (the major share is held by Strategy). According to data from BitcoinTreasuries, which tracks Bitcoin holdings, the total holdings of private companies and nations, including publicly listed companies, have reached 7.48%.

If the US government embarks on strategic Bitcoin reserves, demand may further expand in the future.

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