MicroStrategy’s Bitcoin Purchases Drive Deflationary Shifts in the Crypto Market

MicroStrategy Holdings is rapidly accumulating Bitcoin, significantly impacting market liquidity and potentially sparking a deflationary trend in the cryptocurrency market. Ki Young Ju, CEO of CryptoQuant, highlights that MicroStrategy’s acquisitions are outpacing mining rates, shrinking BTC supply available for trading. This creates a potential bottleneck in market liquidity, according to Ju, who predicts an annual deflation rate of -2.23%. The firm’s substantial Bitcoin holdings now exceed new coin mining output, mirroring the historical trend of institutional investing impacting Bitcoin price dynamics and potentially disrupting conventional market models.