Bitcoin enters the 'negative inflation era': MicroStrategy daily buys 2000 BTC, supply tightening may trigger a new bull run.

Original title: Bitcoin now deflationary due to Strategy's BTC purchases — Analyst

Original author: Vince Quill

Source text:

Compiler: Daisy, Mars Finance

Institutional investors are changing the landscape of the Bitcoin market—As large organized entities continue to consume newly mined Bitcoin supply, MicroStrategy's accumulation of Bitcoin has outpaced the total production of miners, resulting in a total supply-constrained annual deflation rate of -2.33%. Ki Young Ju, CEO and market analyst of crypto quantitative analysis firm CryptoQuant, pointed out: "The company holds 555,000 Bitcoins in a non-liquid state with no plans to sell, which alone causes an annual deflation rate of -2.23%. When accounting for other stable holding institutions, the actual deflation rate may be even higher."

MicroStrategy co-founder Michael Saylor is a vocal advocate for Bitcoin, promoting the value of this scarce digital currency to potential investors and encouraging numerous companies to follow its Bitcoin treasury reserve strategy.

The total BTC supply is shrinking due to Strategy accumulating Bitcoin. Source: Ki Young Ju

The company also bridges the fiat world and cryptocurrency assets by issuing corporate bonds and stocks to channel traditional financial market (TradFi) funds into Bitcoin. According to Seiler, over 13,000 institutions already hold MicroStrategy stocks directly.

Bitcoin investors are closely monitoring this company's profound impact on the market landscape:

The institutional adoption trend led by MicroStrategy further tightens the circulating supply, pushing up coin prices while effectively stabilizing market fluctuations. As Adam Levenson, author of "The Bitcoin Era and the Great Harvest," stated: "MicroStrategy is essentially implementing a 'synthetic halving' on Bitcoin through a demand growth rate that far exceeds miners' output"—currently, the daily production of miners across the network is about 450 BTC, while MicroStrategy's average daily purchases reach 2,087 BTC, more than four times the miners' output.

Miner reserves are dwindling and are in a long-term decline. Source: CryptoQuant

Hedge funds, pension funds, asset management companies, and technology enterprises continue to use Bitcoin as a tool for portfolio diversification or as a financial asset against fiat currency inflation. The inflow of ETF funds stabilizes the coin price by introducing new capital from traditional financial markets, making market fluctuations more moderate. However, Anthony Scaramucci, founder of SkyBridge Capital, pointed out that the heaviest institutional players—sovereign wealth funds—will not enter the market in large numbers until a clear regulatory framework for cryptocurrency is established in the United States, and this regulatory breakthrough will trigger large-scale purchases by sovereign funds, further driving up the price of Bitcoin.