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 is just not, 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.

Nevertheless, 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 signifies that the asset’s provide is designed to lower over time. So, by that clarification, the newly minted BTC every single day (at the moment ~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 scale back the general provide from 200,000 to 100,000.

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

In BTC’s case, although, there’s one massive (un)spoken hero who deserves a giant “thanks” from Bitcoin Maxis, in keeping with CryptoQuant’s chief exec, Ki Younger Ju (despite the fact that he deleted the unique submit 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 sooner 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 that MSTR’s holdings are equal to -2.23% annual deflation fee for bitcoin. The proportion may very well be even larger once we study different “secure institutional holders” who’ve included the HODL technique.

#Bitcoin is deflationary.@Strategy is shopping for BTC sooner than it’s mined. Their 555K BTC is illiquid with no plans to promote. MSTR’s holdings alone imply a -2.23% annual deflation fee—probably larger 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 combating to remain above $10,000 (sure, one zero lower than now), the NASDAQ-listed enterprise intelligence software program agency purchased 21,454 BTC by way of 78,388 off-chain transactions.

Within the following 12 months, the cryptocurrency’s worth skyrocketed to an all-time excessive of just about $70,000. The corporate stored shopping for. Then, the asset plunged deep under $20,000 following the FTX crash in addition to many different trade blow-offs. The agency continued accumulating, despite the fact that its stash was now properly within the crimson.

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