Analyst: Due to the large purchases by institutions such as Strategy, Bitcoin is currently in a state of Deflation.

Recently, CryptoQuant analyst Ki Young Ju pointed out that large institutions, such as Strategy, are reshaping market dynamics with their Bitcoin purchases. Ju mentioned that Strategy is accumulating Bitcoin at a rate exceeding the total daily output of miners, resulting in an annual Deflation rate for Bitcoin of -2.33%.

In his May 10 social media post, Ju stated: "The 555,000 BTC held by Strategy has limited liquidity and there are no plans for sale." He added that the holdings of Strategy alone have resulted in an annual Deflation rate of -2.23%, while other robust institutional holders may have even higher holdings.

Michael Saylor, co-founder of Strategy, is an active advocate for Bitcoin, dedicated to promoting the scarcity of Bitcoin and encouraging other companies to adopt Bitcoin financial strategies. Saylor noted that over 13,000 institutions hold Strategy stocks in their portfolios, driving further development of the Bitcoin market.

In addition, Strategy attracts traditional financial capital by innovatively issuing bonds and equity, using the funds raised to purchase Bitcoin. This effectively restricts market supply, drives up BTC prices, and effectively reduces its high volatility.

According to writer Adam Back, the current daily Bitcoin production by miners is approximately 450 BTC, while Strategy accumulates an average of 2,087 BTC daily, which is about four times the miners' output, exacerbating the supply-demand imbalance and reinforcing the "halving" effect of Bitcoin.

However, SkyBridge founder Anthony Scaramucci believes that major institutions such as sovereign wealth funds will remain cautious in their purchases of Bitcoin until a clear regulatory framework is established. Once regulations are clarified, there may be a significant influx of wealth funds buying in, which could drive prices up again.

In conclusion, due to the large purchases by institutions like Strategy, the supply of Bitcoin has decreased while demand has continued to increase. This imbalance between supply and demand has not only driven up the price of Bitcoin but also balanced the market's high volatility.

However, further development of the market still needs to wait for clear regulatory policies from major economies such as the United States to provide a more solid foundation for the long-term stability and growth of Bitcoin.

#比特币 # institutional purchase #Deflation