Bitcoin is currently deflationary because to Strategy's BTC purchases—Analyst
Strategy, a Bitcoin treasury firm co-founded by Michael Saylor, is accumulating Bitcoin faster than the entire daily miner production, essentially rendering Bitcoin deflationary, with an estimated yearly deflation rate of -2.33%. The strategy now owns roughly 555,000 BTC, which is deemed illiquid with no plans to sell, removing a major percentage of the Bitcoin supply from circulation.
This rapid collection exceeds the combined daily miner output of about 450 BTC, with Strategy apparently purchasing around 2,087 BTC each day--more than four times the miners' daily productivity.
Analysts refer to this scenario as a "synthetic halving" of Bitcoin supply, in which demand from Strategy and other institutional holdings outpaces new Bitcoin generation, constraining supply and perhaps pushing price rise.
Strategy also connects Bitcoin to traditional financial markets by generating funds, which is then used to support future Bitcoin purchases. Over 13,000 institutions apparently own Strategy shares, demonstrating widespread institutional exposure to Bitcoin through this vehicle.
Strategy accumulation has a substantial influence on Bitcoin market dynamics by constraining available supply, promoting institutional adoption, and minimizing price volatility. However, larger institutional engagement is projected to grow only if clearer bitcoin rules are implemented in the United States.
The strategy's large-scale BTC purchases have pushed Bitcoin into a deflationary state by absorbing more new supply than miners can create, lowering circulating supply and influencing market behavior toward higher prices and less volatility.