Analyst: Bitcoin is currently in a deflationary state due to large purchases by institutions like Strategy
Recently, CryptoQuant analyst Ki Young Ju pointed out that large institutions such as Strategy are reshaping market dynamics with their Bitcoin purchases. Ju mentioned that Strategy is accumulating Bitcoin at a rate exceeding the daily total output of miners, resulting in an annual deflation rate of -2.33% for Bitcoin.
In his social media post on May 10, Ju stated: "The 555,000 BTC held by Strategy have limited liquidity and there are no plans to sell." He added that Strategy's holdings alone have led to an annual deflation rate of -2.23%, while other robust institutional holders may have even higher holdings.
Michael Saylor, co-founder of Strategy, is a strong advocate for Bitcoin, dedicated to promoting its scarcity and encouraging other companies to adopt Bitcoin financial strategies. Saylor pointed out that over 13,000 institutions hold Strategy's stock in their portfolios, driving further development of the Bitcoin market.
Additionally, Strategy has attracted traditional financial funding through innovative bonds and equity offerings, using the raised funds to purchase Bitcoin. This move effectively restricted market supply, pushing BTC prices up and significantly reducing its high volatility.
According to writer Adam Back, the current daily Bitcoin output by miners is about 450 BTC, while Strategy's average daily accumulation reaches 2,087 BTC, approximately four times the miners' output, exacerbating the supply-demand imbalance and reinforcing Bitcoin's "halving" effect.
However, SkyBridge founder Anthony Scaramucci believes that major institutions, such as sovereign wealth funds, will remain cautious in their Bitcoin purchases until a clear regulatory framework is established. Once regulations are clarified, there may be significant purchases by wealth funds, driving prices up again.
In summary, the substantial purchases by large institutions like Strategy have led to a decrease in Bitcoin supply and a continuous increase in demand. This supply-demand imbalance has not only driven up Bitcoin prices but also balanced the market's high volatility.
However, further market development still awaits clear regulatory policies from major economies like the United States, which can provide a more solid foundation for Bitcoin's long-term stability and growth.
