Bitcoin’s price could surge dramatically, fueled by the “dry powder” sitting on the balance sheets of companies that hold significant amounts of bitcoin, according to a new analysis from NYDIG.

In a report published this week, Greg Cipolaro, the global head of research at NYDIG, explains how public companies with large bitcoin holdings may have the potential to use their stock valuations to raise capital, which could then be used to purchase even more bitcoin. This influx of capital could potentially create upward momentum for bitcoin’s price, further solidifying its position in the market.

Cipolaro’s analysis suggests that this “dry powder” effect, driven by equity issuances and bitcoin purchases, could push bitcoin’s price up by as much as $42,000, representing a 44% increase from its current level near $96,000. The model assumes that the buying pressure generated by these companies could create a self-sustaining cycle that raises both the value of bitcoin and the stock prices of companies holding it.

The rising institutional involvement in the bitcoin market is exemplified by Twenty One, a dedicated bitcoin accumulation vehicle backed by Tether, Bitfinex, and Cantor Fitzgerald. This initiative highlights a growing trend where companies are focusing specifically on acquiring and holding bitcoin as a strategic investment, rather than integrating it into broader business operations.

Currently, 69 public companies collectively hold over $69 billion worth of bitcoin. Cipolaro believes that these firms, armed with significant “dry powder,” are poised to leverage their stock premiums to acquire even more bitcoin, further influencing the market’s dynamics.

“Equity issuance by these firms could create a substantial wave of bitcoin buying, which would push prices higher,” Cipolaro concludes, noting the growing importance of corporate balance sheets in the bitcoin market.

As more companies join the trend of holding bitcoin, the influence of these treasury firms will likely continue to grow, creating new opportunities for capital inflows and potentially leading to higher bitcoin prices.