Original title: Bitcoin now deflationary due to Strategy's BTC purchases — Analyst
Original author: Vince Quill
Original source: https://cointelegraph.com/
Translation by: Daisy, Mars Finance
Institutional investors are changing the Bitcoin market landscape—large organized entities are continuously consuming the newly mined Bitcoin supply, and MicroStrategy's Bitcoin accumulation rate has surpassed the total output of miners, resulting in a fixed total Bitcoin annual deflation rate of -2.33%. Ki Young Ju, CEO and market analyst of the crypto quantitative analysis firm CryptoQuant, pointed out: "The company holds 555,000 Bitcoin in a non-liquid state with no plans to sell, and this portion alone causes a -2.23% annual deflation rate. Including other stable holding institutions, the actual deflation rate may be even higher."
Michael Saylor, co-founder of MicroStrategy, is a vocal advocate for Bitcoin, promoting the value of this scarce digital currency to potential investors and encouraging numerous companies to adopt its Bitcoin treasury reserve strategy.
The total BTC supply is shrinking due to Strategy accumulating Bitcoin. Source: Ki Young Ju
The company is also channeling traditional financial market (TradFi) funds into Bitcoin through the issuance of corporate bonds and stocks, building a bridge between the fiat world and crypto assets. According to Saylor, over 13,000 institutions already hold MicroStrategy's stock directly.
Bitcoin investors continue to focus on this company's profound impact on the market landscape:
The institutional adoption wave led by MicroStrategy further tightens the circulating supply and boosts the price, while effectively stabilizing market volatility. As Adam Livingston, author of (The Bitcoin Era and the Great Harvest), stated: "MicroStrategy is effectively implementing a 'synthetic halving' on Bitcoin through a demand growth rate that far exceeds miner output"—currently, the total daily output from miners is about 450 BTC, while MicroStrategy's daily purchase volume reaches 2,087 BTC, exceeding miner output by more than four times.
Miner reserves are dwindling and are in a long-term decline. Source: CryptoQuant
Institutional investors such as hedge funds, pension funds, asset management companies, and tech firms continue to treat Bitcoin as a tool for portfolio diversification or a financial asset against fiat currency inflation. ETF inflows stabilize the price of Bitcoin by introducing new capital from traditional financial markets, leading to reduced market volatility. However, Anthony Scaramucci, founder of SkyBridge Capital, pointed out that the most significant institutional players—sovereign wealth funds—will not enter the market in large numbers until a clear regulatory framework for crypto is established in the U.S., which will trigger massive purchases by sovereign funds and further drive up Bitcoin prices.
