How Saylor’s Strategy Transformed Bitcoin into a Deflationary Asset: Details

By being pre-programmed to have solely 21 million bitcoins ever to exist, the most important cryptocurrency’s mannequin shouldn’t be, by definition, deflationary. In any case, new BTC is mined every single day, and none is being destroyed within the conventional sense of the phrase, which is the other of deflationary.

Nonetheless, CryptoQuant’s CEO defined how Technique and its co-founder, and BTC champion, Michael Saylor, made bitcoin right into a deflationary asset.

Is BTC Deflationary?

By definition, deflationary implies that the asset’s provide is designed to lower over time. So, by that clarification, the newly minted BTC every single day (presently ~450 BTC/day) doesn’t put the cryptocurrency into that class. Somebody would argue that BNB needs to be there because it has a burning mechanism to cut back the general provide from 200,000 to 100,000.

Ethereum additionally made some progress on that matter, however that’s a distinct and somewhat controversial subject (and it doesn’t actually work as promised, a minimum of not at all times).

In BTC’s case, although, there’s one huge (un)spoken hero who deserves a giant “thanks” from Bitcoin Maxis, in response to CryptoQuant’s chief exec, Ki Younger Ju (regardless that he deleted the unique put up with the thanks notice). Within the up to date one, he defined that Michael Saylor, by means of the corporate he co-founded, has turned Bitcoin right into a deflationary asset as a result of the entity is “shopping for BTC quicker than it’s mined.”

CQ’s CEO decided that Technique’s technique (yeah, we get the way it sounds) to not promote at any value has turned its huge stash of over 555,000 BTC into an illiquid provide. Which means MSTR’s holdings are equal to -2.23% annual deflation charge for bitcoin. The proportion could possibly be even greater once we study different “secure institutional holders” who’ve included the HODL technique.

#Bitcoin is deflationary.@Strategy is shopping for BTC quicker than it’s mined. Their 555K BTC is illiquid with no plans to promote. MSTR’s holdings alone imply a -2.23% annual deflation charge—seemingly greater with different secure institutional holders. pic.twitter.com/9VKT3IdcYo

— Ki Younger Ju (@ki_young_ju) May 10, 2025

555,450 and Counting

The corporate started its huge accumulation spree in September 2020 when it was referred to as MicroStrategy and Saylor was nonetheless CEO. At a time when bitcoin was preventing to remain above $10,000 (sure, one zero lower than now), the NASDAQ-listed enterprise intelligence software program agency purchased 21,454 BTC through 78,388 off-chain transactions.

Within the following yr, the cryptocurrency’s value skyrocketed to an all-time excessive of just about $70,000. The corporate stored shopping for. Then, the asset plunged deep beneath $20,000 following the FTX crash in addition to many different business blow-offs. The agency continued accumulating, regardless that its stash was now effectively within the purple.

The 2024 US elections solely strengthened Technique’s conviction, and the agency now owns 555,450 BTC, valued at nearly $58 billion at present costs. This places its holdings in an unrealized revenue state of practically $20 billion.