Despite its growing footprint as a major corporate holder of bitcoin (BTC), Strategy’s large-scale purchases of the cryptocurrency appear to have little, if any, influence on its price, according to a research paper by TD Cowen.

The findings published Monday challenge a popular theory among skeptics — that Strategy’s aggressive buying spree is helping prop up bitcoin’s value, and that without its continued demand, prices would falter. But based on the data, that argument doesn’t hold much weight, the analysts said.

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.

“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.

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%.

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.

“We expect Strategy will continue to drive positive BTC Yield for the foreseeable future. While BTC Yield will likely fall to the extent bitcoin continues to rise in price, the dollar value of incremental gains from Strategy’s Treasury Operations could remain highly advantageous to shareholders,” the analysts wrote.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

The U.S. Securities and Exchange Commission has long been the world’s most influential financial regulator, helping to ensure our capital markets are the deepest, fairest, and most accessible in the world. But its continued relevance will depend on whether it can do more than merely respond to innovation — it must proactively foster it.

For nearly a century, the SEC has adapted to evolving markets, new technologies and greater retail participation. In its best moments, the agency has embraced innovation in service of transparency, investor protection, and capital formation. But in recent years, it has strayed from that legacy — nowhere more visibly than in its approach to crypto and blockchain.

The good news is, with a change in leadership and a more open posture emerging, the SEC has a chance to course-correct. But the bigger question is: how do we make that change permanent? How do we build innovation into the SEC’s DNA so that the next promising financial technology isn’t strangled in its crib?

I spent nearly six years at the SEC, first as a Senior Counsel in the Division of Enforcement and then as Chief Counsel in the Office of Legislative and Intergovernmental Affairs. I’ve since held senior legal and policy roles in crypto firms across the ecosystem. From both perspectives, one thing is clear: the SEC can fulfill its mission more effectively — and maintain its global leadership — only if it becomes a proactive partner in financial innovation.

The SEC at Its Best

The SEC has a proud history of embracing change to the benefit of investors and markets alike. In the 1990s, it digitized corporate filings through EDGAR, replacing paper documents with searchable databases. It later approved Regulation ATS, enabling the rise of alternative trading systems that increased competition and liquidity. ETFs, which were once novel, are now mainstream products that offer low-cost, diversified exposure to a wide range of assets. More recently, fractional-share trading has empowered millions of retail investors to own a slice of companies they once could only admire from afar.

One especially relevant example as the SEC thinks about how to regulate crypto is the agency’s treatment of asset-backed securities. In the 1980s and 1990s, the SEC recognized that these complex financial products didn’t fit neatly into existing disclosure regimes. After years of study and no-action letters, it developed a tailored disclosure framework in 2004 — refined further in 2014 — that balanced innovation with investor protection. And it didn’t need to bring hundreds of enforcement actions to do it.

When the SEC Fell Behind

There are also times the SEC failed to adapt, to the detriment of both investors and markets. It was slow to respond to the rise of high-frequency trading, contributing to the 2010 Flash Crash. It took years to implement the crowdfunding rules authorized by the JOBS Act. It lagged on digital reporting standards, delaying broader access to market data.

And, for much of the last few years, its stance on crypto veered from caution to outright hostility. Instead of issuing clear rules for digital assets, the agency pursued a scattershot enforcement campaign — often against firms that were seeking to comply in good faith. Many of these actions didn’t even involve fraud or investor loss. Meanwhile, American crypto companies fled overseas, and a global industry flourished without us.

Even the SEC’s grudging approval of spot bitcoin ETFs in 2024 came only after it was forced by a federal court. And while the agency at one point talked about creating a crypto disclosure framework akin to what it did for ABS, it never followed through.

Innovation Isn’t the Enemy

Crypto may be new, but the SEC has faced this challenge before. It knows how to modernize its rules to meet new realities. What’s different now is the opportunity to leverage innovation — not just regulate it.

Take blockchain technology. It could enable near-instant trade settlement, reducing risk and freeing up capital. It could improve market transparency through immutable records and real-time transaction data. It could lower operational costs by reducing intermediaries. And tokenization could expand access to private markets and hard-to-reach asset classes, benefiting both issuers and investors.

Ironically, the SEC hasn’t seriously explored how blockchain could improve its own market oversight. That’s a missed opportunity. But it’s not too late.

A Blueprint for the Future

So what would it look like to build innovation into the SEC’s core mission?

• Revise the SEC’s Mandate: Congress should amend the Securities Exchange Act of 1934 to explicitly include the promotion of innovation and modernization, alongside investor protection, market integrity, and capital formation.
• Rethink Metrics of Success: The SEC shouldn’t measure success solely by the number of enforcement actions or penalties collected. It should also look to capital formation, investor confidence, and the safe adoption of new technologies.
• Create an Innovation Office: A dedicated, empowered team should engage with entrepreneurs, technologists, and academics to guide responsible innovation — just as similar offices in the U.K. and Singapore have done.
• Adopt Risk-Based Regulation: Not every new product or platform needs full regulatory treatment on day one. Pilot programs, safe harbors, and regulatory sandboxes can help innovators test ideas while maintaining appropriate guardrails.
• Invest in Education and Training: SEC staff need better fluency in emerging technologies. Cross-disciplinary expertise should be rewarded and cultivated.

These are not radical ideas — they are proven tools drawn from the SEC’s own playbook.

In a global race to define the future of finance, the SEC has a choice: lead or fall behind. Its greatest strength has always been its credibility and ability to adapt.

The next generation of investors and entrepreneurs won’t wait around for 20th-century rules to catch up to 21st-century innovation. Nor should they have to. If the SEC wants to remain the gold standard, it must adapt once again — not just to the present, but to what comes next.

We are never shy about holding ETH to account as crypto’s second largest asset and the DeFi intuition gateway for traditional investors. But mainstream adoption requires a growth story, and so far this year ETH is (put kindly) failing to lead.

ETH sits in 16th place in the CoinDesk 20 YTD performance leaderboard, down 53%. Going back a year, the numbers look similar: 15th place and down 50%. Its market cap has dwindled so much relative to XRP that both are expected to be capped in the upcoming CoinDesk 20 reconstitution, a first.

ETH’s woes are news to few in the industry, but for us as index and product builders for «5%-ers,» it begs the question: is ETH still special? A distinguished provenance can only take you so far. ETH continues to dominate its on-chain categories (even before adding in L2s) and is arguably the second best brand name in crypto. There are even thoughtful ideas about ETH’s end-state as an essential supporting component of our blockchain future; we hear expressions like, «Ethereum will be the clearinghouse of DeFi.»

But mainstream adoption requires a growth story.

We have observed over the last few weeks that bitcoin has shown impressive resilience to fragile global markets. This past week was no exception, and as we pointed out last week, expectations for higher inflation – now echoed by Fed Chair Powell – could help support movement into bitcoin.

But the crypto market’s dependency on bitcoin to lead prices higher is one we hope the digital asset class outgrows. ETH can reassert a leadership position, as it briefly did in the weeks following the U.S. election. If not, CoinDesk 20 investors have exposure to much of ETH’s competition.