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Strategy is a frequent Bitcoin buyer and already accumulates more than half a million BTC.
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This situation is positive for the price of BTC, but also has risks.
Bitcoin (BTC) is showing «deflation» behavior. Yes, in quotes. Not because its monetary policy has been modified – which is still the same since its creation – but because there are less and less BTC available to circulate. And that shortage is not due to the fact that less coins are issued, but to that a growing part of the supply is being absorbed by institutions that have no plans to sell (or, at least, they say and demonstrate so far).
In recent months, a new phenomenon was consolidated: the supply of BTC available outside Microstrategy (currently renowned Strategy) has begun to decrease.
This is demonstrated by the following graph, provided by the Cryptoquant analysis firm, which is observed A sustained fall in BTC’s total offer excluding Strategy holdings. This means, in practical terms, that the BTC operating market – that is, what is available to buy or use – is getting smaller.
The main cause is the aggressive accumulation by Strategy. The company led by Michael Saylor already has more than 555,000 bitcoin. And most importantly: those bitcoin are long -term reserves.
From the technical, Bitcoin’s monetary policy remains the same: limited broadcast, Halving every four years, and a maximum total offer of 21 million. That has not changed. Bitcoin, strictly speaking, remains anti -inflationary (which is not the same as deflation). What yes has changed is the structure of demand and the profile of the Hodlers.
Strategy is buying BTC faster than it is mine. After the Halving of April 2024, the daily broadcast is around 450 BTC. If a company acquires an average higher than that figure, it is absorbing more than 100% of the new offer. In addition to other institutional holders with a vocation of “perpetual Hodl”, the result is clear: What remains for the rest of the market is less and less.
Therefore, although Bitcoin is not deflationary in the classical sense – that is, there is no reduction of total circulating – its current operation resembles that of an deflationary asset. The fall in the available offer generates a perceived shortage that can have effects similar to monetary contraction: upward pressure on the price and a growing competition by the units that are still in circulation.
The CEO of Cryptoquant, Ki Young Ju, contributed a forceful reading: «Bitcoin is deflation,» he wrote in his X account. According to his estimate, only Strategy holdings imply a “deflation rate” of 2.23% annually, considering that those bitcoin are illegids and not supposing that they will not return to the market. «It is surely higher if we add other stable institutional holders,» he added.
The graph that accompanies its statement (the same one that is published as an internal image above this text) makes it clear: since mid -2023, the supply of BTC out of Strategy not only stagnates, but begins to decrease. A trend that deepens in 2024.
As more BTC are removed from circulation by actors with long -term vision, the operating market becomes narrower. That implies that even small demand movements can generate amplified price reactions.
And there is something else: the profile of Bitcoin’s holders is changing. It is no longer just individual investors or visionary technologists. Now funds, companies, banks and even governments enter. All with institutional structures that favor storage, not rotation. The result is that there are more and more BTC «immobilized.»
Cryptonoticias reported that, only in April, at least 10 public and private contribution companies added more bitcoin to their treasury.
What we are seeing today could lead to a redefinition in the way of analyzing Bitcoin. Until now, the focus was placed in the total emission or in the annual inflation rate. But Maybe it’s time to prioritize a more revealing indicator: The liquid offer.
Not all BTC that exist are really available. There are between 3 and 4 million lost bitcoins. To this are added the BTC attributed to Satoshi Nakamoto (which will allegedly be moved), and now also those that are owned by companies such as Strategy. All that leaves an increasingly reduced operational fraction.
In that context, traditional metrics could be obsolete. What matters is not only how many bitcoins exist, but how many are in the market.
The accumulation of Strategy and other institutional actors is reinforcing Bitcoin’s thesis as digital gold. Not only because of its structural scarcity and its resistance to inflation, but for its growing illiquidity. Just as a good part of the world gold is stored in vaults that will not see it circular again, also the BTC are finding «permanent homes.»
It is possible that Bitcoin’s future is this: an increasingly difficult value reserve, accumulated by those who arrived before or understood first. And that, even if it is not written in the code, makes it deflationary in the facts.
The phenomenon of Bitcoin’s «functional deflation» raises a scenario of clear benefits, but also of latent risks that should not be underestimated.
On the benefit side, the most obvious is the already explained impact on the price. If the offer is reduced – not by an alteration of the Bitcoin code, but by an increasing illiquidity in the market – then each unit available becomes more valuable in relative terms. In a free market economy, when a scarce good is highly demanded, its price tends to rise.
However, the main risk is that this shortage is not irreversible. Bitcoin accumulated by Strategy, for example, are not out of the system. They are not burned or frozen by technical means. They are ilequid, but available. And although Michael Saylor and his company have declared an intention to maintain those reservations for an indefinite time, that promise is not a legal commitment or a guarantee. It is an investment strategy, subject to changes if the context merits it.
In case Strategy, or another great entity with an important position in BTC, decided to liquidate even a small fraction of their holdings, the psychological effect on the market could be devastating.
Bitcoin, as well as rises in part thanks to the perception that these giants do not sell, could face a chain reaction in the opposite direction. The mere news of a relevant institutional sale could activate panic sales in other market participants, especially among the most speculative retailers.
This risk is amplified by the current market structure: a thinner market, with less liquidity, is also a more volatile market. In other words, the same that enhances the bullish movements – a reduced offer – can also make bearish movements more violent if the flow of orders changes.
Therefore, although the current liquid BTC scarcity has positive effects on the price, it is also a double -edged sword. The thesis of the «functional deflation» depends, ultimately, an implicit consensus: that of not selling. AND Implicit consensus, in financial markets, usually last … until they stop doing so.