Thomas Daniels
Bitcoin has entered a deflationary phase, propelled by aggressive institutional accumulation that now outpaces the rate of new coin issuance.
Leading this trend is Strategy, formerly known as MicroStrategy, which has amassed 555,450 BTC—valued at over $58 billion—rendering these holdings effectively illiquid. According to CryptoQuant CEO Ki Young Ju, this level of accumulation contributes to an estimated annual deflation rate of -2.23% for Bitcoin, a figure that could be even higher when accounting for other stable institutional holders.
Michael Saylor, Strategy’s Executive Chairman, has played a pivotal role in positioning Bitcoin as a corporate treasury asset. The company channels capital from traditional financial markets into Bitcoin through the issuance of corporate debt and equity. This has led over 13,000 institutional investors to hold Strategy’s stock, further intertwining traditional finance with the cryptocurrency ecosystem.
According to analyst Adam Livingston, author of The Bitcoin Age and The Great Harvest, Strategy’s average daily acquisition of 2,087 BTC now significantly surpasses the daily miner output of approximately 450 BTC. This purchasing behavior effectively “synthetically halves” Bitcoin’s supply, intensifying scarcity and bolstering the asset’s deflationary characteristics.
The broader institutional landscape is also reinforcing Bitcoin’s deflationary momentum. Hedge funds, pension funds, asset managers, and tech companies are increasingly adopting Bitcoin as both a portfolio diversifier and a hedge against fiat currency debasement. Additionally, Bitcoin ETF inflows are contributing to price stability by providing consistent capital from traditional markets, thereby reducing volatility.
However, broader participation from sovereign wealth funds remains on hold pending clear regulatory guidance in the United States. Anthony Scaramucci, founder of SkyBridge Capital, has noted that only a comprehensive regulatory framework will unlock significant investment from these funds. When such clarity is achieved, it is expected to trigger large-scale Bitcoin acquisitions and further impact the market.
As institutional adoption accelerates and the circulating supply of Bitcoin becomes increasingly constrained, its deflationary trajectory is likely to persist—potentially reshaping the financial landscape and supporting upward price momentum.
