Strategy’s BTC Buying Turns Bitcoin Deflationary — Analyst

Strategy is acquiring more Bitcoin than miners can produce. This results in a -2.33% annual deflation rate, reshaping the crypto market’s supply dynamics.

Strategy leads institutional Bitcoin accumulation

Strategy, a major institutional BTC holder, is acquiring Bitcoin faster than the network can supply it. According to CryptoQuant CEO Ki Young Ju, this accumulation has created a -2.33% annual deflation rate for BTC.

In a May 10 post on X, the analyst explained that Strategy’s 555,000 BTC are “illiquid” and unlikely to be sold. With more stable institutions following suit, this trend could accelerate further, reducing market availability of new BTC.

Bridging Bitcoin with traditional finance

Michael Saylor, Strategy’s co-founder, continues to champion Bitcoin as a limited-supply asset. Strategy funds its BTC acquisitions through corporate debt and equity sales, bringing traditional capital into the Bitcoin market.

Saylor noted that over 13,000 institutional investors currently hold Strategy’s stock. This strengthens the firm’s role in bringing Bitcoin to the institutional mainstream and reduces volatility.

Market effects and regulatory outlook

Adam Livingston, author of “The Bitcoin Age and The Great Harvest,” says Strategy is “synthetically halving” Bitcoin by acquiring over 2,000 BTC daily — more than four times current miner output.

Other institutions — from hedge funds to tech giants — are also buying Bitcoin as a treasury asset or inflation hedge. ETF inflows have added stability by smoothing volatility and absorbing downward price pressure.

However, sovereign wealth funds are expected to hold off until regulatory clarity emerges in the U.S. SkyBridge founder Anthony Scaramucci believes clear rules would spark a new wave of sovereign institutional adoption and price growth for Bitcoin.