Bitcoin is exhibiting deflationary characteristics due to the accumulation pace of Strategy, the digital asset firm led by Michael Saylor. According to Ki Young Ju, CEO of on-chain analytics platform CryptoQuant, Strategy’s current holdings of 555,450 BTC - as of May 4, 2025 - now exceed the rate at which new coins are being mined.
With no plans to liquidate its positions, Strategy’s Bitcoin reserves are effectively illiquid. This level of accumulation, Ki noted, implies an annualized net deflation rate of approximately 2.23%, potentially even higher when accounting for other long-term institutional holders.
Strategic Positioning Despite Operating Losses
While Strategy continues to lead in institutional Bitcoin accumulation, its Q1 financials revealed mixed signals. Revenue fell 3.6% year-over-year to $111.1 million, while the firm posted a net loss of $4.2 billion. The primary contributor was an unrealized loss of $5.9 billion on Bitcoin holdings, which drove total operating expenses up nearly 2,000% year-over-year to $6 billion.
Despite short-term accounting volatility, market analysts forecast that Strategy’s asset-heavy approach may position it favorably in the long term - especially as broader institutional interest in Bitcoin accelerates.
Forecasting Corporate Bitcoin Reserves Through 2029
According to a recent research note from Bernstein, corporate Bitcoin holdings are projected to reach $330 billion by 2029. Strategy is forecasted to retain its leading role in this trend, serving as both a liquidity sink and a macro-hedge reference for other firms entering the space.
The continued removal of BTC from liquid circulation by institutions like Strategy reinforces Bitcoin’s evolving status as a digital store of value. With issuance now lower than select corporate acquisition rates, Bitcoin is behaving less like a transactional currency and more like a deflationary monetary asset - a dynamic likely to shape future crypto market forecasts and investment narratives.
