In the past, Bitcoin prices were driven by multiple sources of demand, including retail investors, institutions, speculators, and ETF capital flows. But today, the capital structure of the crypto market is becoming increasingly concentrated to an unprecedented degree. The latest data shows that Strategy (MSTR) is emerging as the most central force underpinning Bitcoin prices.
Currently, Bitcoin is trading at approximately $77,500, down nearly 30% from a year ago. Against a backdrop of weak overall market demand, Strategy, led by Michael Saylor, continues to buy Bitcoin on a large scale. According to company disclosures, Strategy has purchased a total of 171,238 Bitcoins so far this year — a volume that exceeds the roughly 62,000 Bitcoins newly generated by global miners over the same period.
Research firm 10x Research states bluntly that if investors are still looking at Federal Reserve statements, macroeconomic data, or ETF flows to gauge Bitcoin’s direction, “they are likely missing the real trend.”
Strategy primarily raises funds through a perpetual preferred stock financing tool called STRC, which offers investors an 11.5% annual cash dividend. The company uses the proceeds to continuously buy spot Bitcoin. Market data shows that in just the past three weeks, Strategy has accounted for about 12% of total Bitcoin trading activity, and in certain weeks, its share has exceeded 20%. Markus Thielen, CEO of 10x Research, believes that Bitcoin demand is now increasingly dependent on “financial engineering” rather than natural market demand.
Meanwhile, key forces that drove the 2024 Bitcoin bull market — such as ETF arbitrage flows, retail investors, and long-term holding by miners — are noticeably weakening. U.S. Bitcoin ETF flows have slowed significantly recently, while retail trading volumes in Asian markets like South Korea continue to decline. Additionally, mining companies have started selling more Bitcoin to pivot toward AI data centers and computing infrastructure businesses. This means the Bitcoin market is becoming increasingly reliant on a single buyer for support.
Currently, Strategy holds approximately 843,700 Bitcoins, with an average purchase cost of around $75,700 — only slightly below the current market price. If Bitcoin prices fall further, it would not only impact Strategy’s balance sheet but could also undermine market confidence in the STRC financing model, potentially triggering a negative feedback loop.
More notably, Strategy’s management recently hinted for the first time at the possibility of “selling some Bitcoin” in the future. Saylor likened the company to a real estate developer, stating that if it helps improve the capital structure or enhance “Bitcoin per share value,” the company might sell a portion of its Bitcoin holdings in the future. However, analysts generally believe that Strategy will continue its aggressive accumulation strategy in the near term. Increasingly, the market is concerned about whether this roughly $1.5 trillion crypto asset market has become overly dependent on a single buyer for support.
