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Viewpoint: If the Strategy continues to increase its holdings of BTC, it may weaken the applicability of its Central Bank reserves.
On June 11, Sygnum, a regulated digital asset bank, said that Strategy is accumulating excess BTC holdings through leverage, but that this practice could distort liquidity and sentiment, posing a long-term risk to Bitcoin’s stability and its wider adoption by institutional allocators, thereby weakening Bitcoin’s suitability as a central bank reserve asset. Analysts believe that Strategy’s holdings are approaching a tipping point where problems arise, with the company’s holdings of bitcoin accounting for close to 3% of total bitcoin issuance, but a much higher percentage of the actual circulating supply. (The Block)