The company’s rapid accumulation of Bitcoin is acting as a reliable constraint on newly mined supply, argues author Adam Livingston.
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Michael Saylor’s Strategy is “synthetically halving Bitcoin” (BTC) by purchasing half or more of the newly minted supply from miners every single month, according to Adam Livingston, a BTC analyst and author of “The Bitcoin Age and The Great Harvest.”
Livingston said miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day — far in excess of daily miner output. The author added:
“When Bitcoin becomes this scarce, access to Bitcoin will require paying a premium. Lending against Bitcoin will cost more. Borrowing Bitcoin will become a luxury business reserved for nation-states and corporate whales, and Strategy will control the bottleneck.”
“BTC’s global cost of capital will no longer be set by ‘the market.’ It will be set by the gravitational policies of the first Bitcoin superpower: Strategy,” Livingston continued.
The author’s prediction of a Bitcoin supply crunch translates into much higher BTC prices if Strategy can continue its pace of BTC acquisitions while market demand for the supply-capped digital asset grows among institutional and retail investors.
Related: Michael Saylor hints at Bitcoin purchase as whales stack aggressively
Institutions like Strategy are driving the world toward hyperbitcoinization
Cypherpunk and Blockstream CEO Adam Back predicted that Strategy and other institutions that have adopted a Bitcoin corporate treasury plan will drive the market capitalization of BTC to $200 trillion.
“Strategy and other treasury companies are an arbitrage of the dislocation between the Bitcoin future and today’s fiat world,” Back wrote in an April 26 X post.
Critics of the company warn that the debt-based approach to BTC acquisition could sink Strategy financially if a prolonged BTC bear market takes effect and also warn of greater systemic risks to BTC from such a high concentration of the digital currency held by a single entity.
However, Bitcoin advocate and author Saifedean Ammous recently said that Strategy’s concentration of BTC doesn’t threaten the protocol.
Ammous argued that institutions like BlackRock and Strategy holding high concentrations of BTC could not engineer a hard fork increasing Bitcoin’s maximum supply, as it would massively devalue their holdings, which, at the end of the day, belong to shareholders with the power to divest.
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