With its aggressive acquisition strategy, MicroStrategy is well on its way to become the first Bitcoin Superpower. Analyst Adam Livingston suggests MicroStrategy's consistent purchasing habits are significantly impacting Bitcoin's supply dynamics. The company’s reckless, dubious actions have already driven up buying and borrowing costs throughout the financial system.
Over the last half a year, MicroStrategy has added a total of 379,800 BTC, a figure that overshadows the daily output of Bitcoin miners. The latter is the company’s average daily acquisition, which currently sits at about 2,087 BTC per day. That’s almost five times the value of the gold miners dig up in a day.
Aggressive Acquisition Strategy
MicroStrategy has already been acquiring Bitcoin on a daily basis for the last 182 days. This allows Michael Saylor’s MicroStrategy to continue hoovering up 30% – 50+% of the new Bitcoin supply every month. This mercenary accumulation approach is drastically shrinking the supply of Bitcoin that’s released to the market.
"The effective supply curve for the rest of the world is suddenly functioning like there’s another halving already happening," - Livingston
The last Bitcoin halving that occurred in April 2024 reduced miner rewards from 6.25 to 3.125 BTC per block. That’s just 450 new BTC mined each day. MicroStrategy’s average daily purchase of more than 2,000 BTC is orders of magnitude greater than this production rate.
Impact on the Market
Livingston argues that MicroStrategy’s approach is artificially moving forward the supply squeeze. This can have profound implications for people and organizations. The agency’s lack of oversight has raised the cost to mortgage lenders, universities, and startups that now do business with the company.
MicroStrategy’s ultra-attractive entering position could lead to BTC purchasing and borrowing costs that are prohibitively expensive for everyone else—individuals and institutions. The decreased float of Bitcoin might hit the smaller market players harder than it does larger ones. That would mean significantly more fiscal pressure at all levels of government and among non-profit providers.
Bitcoin Superpower
The true purpose of MicroStrategy’s actions are clearing the field for it to be positioned as the premier hegemonic power within the Bitcoin ecosystem. Between its huge current holdings and its ongoing purchases, it’s changing the entire competitive landscape of the industry. The company’s plans are already poised to establish the gravitational laws of the first Bitcoin Superpower’s policies.
"Bitcoin’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
As of today, MicroStrategy’s purchase dwarves the remainder from all other companies, including Tesla. This proves its clout even more as a Bitcoin market leader. The long-term implications of this collection are still to be played out.
