Bitcoin Turns Deflationary Due to Strategy’s Acquisitions

The pace at which Michael Saylor’s firm, Strategy, is acquiring Bitcoin surpasses the rate at which miners produce new coins. This observation was made by CryptoQuant CEO Ki Young Ju.

#Bitcoin is deflationary.@Strategy is buying BTC faster than it’s mined. Their 555K BTC is illiquid with no plans to sell. MSTR’s holdings alone mean a -2.23% annual deflation rate—likely higher with other stable institutional holders. pic.twitter.com/9VKT3IdcYo

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

“Their 555,000 BTC is illiquid, with no plans to sell. MSTR’s holdings alone imply an annual deflation of 2.23%. Considering other stable institutional holders, it’s likely even higher,” the expert noted.

As of May 4, 2025, the firm held 555,450 BTC. The year-to-date return was 14%.

According to the quarterly report, Strategy’s revenue decreased by 3.6% year-on-year to $111.1 million. The net loss amounted to $4.2 billion.

The firm’s operating expenses in the first quarter surged nearly 2000% year-on-year to $6 billion, primarily due to an unrealized loss on Bitcoin ($5.9 billion).

Earlier, analysts at Bernstein predicted that by 2029, corporations will increase their digital gold holdings to $330 billion, with Strategy remaining a leader in acquisitions.