Institutional investors are changing the Bitcoin market landscape - as large organized entities continue to consume newly mined Bitcoin supply, MicroStrategy's Bitcoin accumulation speed has exceeded total miner production, causing the Bitcoin annual deflation rate to reach -2.33%. CryptoQuant CEO and market analyst Ki Young Ju pointed out: "The 555,000 Bitcoins held by the company are in a non-liquid state with no selling plans, and this position alone causes a -2.23% annual deflation rate. When including other stable coin-holding institutions, the actual deflation rate may be even higher."
MicroStrategy co-founder Michael Saylor is an outspoken Bitcoin evangelist who promotes the value of this scarce digital currency to potential investors and encourages many enterprises to emulate his Bitcoin financial 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 by issuing corporate bonds and stocks, building a bridge between fiat currency and crypto assets. According to Saylor, over 13,000 institutions directly hold MicroStrategy stocks.
Bitcoin investors continue to closely watch the company's profound impact on market dynamics:
The institutional adoption led by MicroStrategy further tightens circulating supply and drives up coin prices, effectively dampening market volatility. As Adam Levinson, author of "The Bitcoin Era and Great Harvest", states: "MicroStrategy is essentially implementing a 'synthetic halving' of Bitcoin through demand growth far exceeding miner production" - currently, network miners produce around 450 BTC daily, while MicroStrategy purchases an average of 2,087 BTC daily, over four times the miner production.
Miner reserves are dwindling and are in a long-term decline. Source: CryptoQuant
Hedge funds, pension funds, asset management companies, and tech enterprises continue to use Bitcoin as a portfolio diversification tool or a financial asset against fiat currency inflation. ETF fund inflows stabilize coin prices by introducing new capital from traditional financial markets, smoothing market volatility. However, Skybridge Capital founder Anthony Scaramucci points out that the most heavyweight institutional players - sovereign wealth funds - will not enter massively before the US establishes a clear crypto regulatory framework, and such a regulatory breakthrough would trigger large-scale Bitcoin purchases by sovereign funds, further pushing up Bitcoin prices.
