Why Strategy’s record accumulation isn’t saving BTC’s price?

Strategy Inc. now holds more Bitcoin than any other institution, but Bitcoin prices have still fallen to a three-week low.

The company bought 171,238 BTC this year, far more than the roughly 62,000 BTC mined globally during the same period.

Strategy is buying Bitcoin nearly three times faster than miners can produce it, yet prices remain under pressure due to money flowing out of Wall Street crypto funds and ongoing inflation concerns.

Strategy overtakes BlackRock as largest holder

According to Cryptopolitan, Strategy recently made another significant acquisition, spending $2.01 billion to acquire 24,869 BTC at an average price of $80,985 per coin.

Just seven days after Strategy broke from its regular purchasing schedule, that was the company’s largest weekly purchase since April 20.

An SEC filing confirmed Strategy Inc. added another 24,869 Bitcoin (in the latest reported week), pushing its total stash to 843,738 BTC.

It now formally surpasses BlackRock’s IBIT, which has between 811,000 and 817,000 BTC.

Although other tracking systems have the actual total at 843,738 BTC, Strategy is currently the greatest Bitcoin holder in the world.

Strategy Inc. is quickly reducing the supply of Bitcoin through large purchases funded by its STRC preferred equity offering.

The company bought more than ten times as much Bitcoin in a single week as miners produced, demonstrating how demand is exceeding supply.

While macroeconomic issues continue to put pressure on the overall market, Mark Palmer of StoneX Group pointed out that strategy seems to be driving the majority of the corporate and ETF-related Bitcoin accumulation this year.

Price falls amid inflation fears and ETF outflows

Bitcoin had a difficult week, dropping back under $80,000 and reaching its lowest valuation in nearly three weeks, while Strategy continued to buy.

On Wednesday, May 20, despite the aggressive buying, the price of Bitcoin fell 4-6% over the course of a day, bringing it down to about $76,593 and falling below $77,000 once more.

The primary cause of the price decline could be the difficult economic climate in which U.S. inflation remains unabated.

With the Federal Reserve maintaining its higher-for-longer interest rate strategy and the core PCE hovering around 2.9%, concerns about increased inflation have made investors more cautious across markets.

The 30-year Treasury yield reached its highest level since 2007 at 5.18% due to a significant selloff in U.S. government bonds brought on by persistent inflation, while the 10-year yield remained close to 4.6%.

By decreasing demand for riskier assets and increasing the appeal of safer products like Treasuries, higher yields typically weaken Bitcoin.

The dollar is strengthened by stronger U.S. rates, which frequently puts more pressure on Bitcoin prices.

A severe lack of demand from institutional investors exacerbates inflation issues.

Major cryptocurrency exchange-traded funds continued to lose money as investors quickly withdrew their capital from Bitcoin products.

After six weeks of inflows, Bitcoin ETFs saw $1 billion in net outflows for the week ending May 17.

Spot Bitcoin ETFs lost an additional $331 million in a single day as the selling persisted.

During this moment of market caution, investors have taken out almost $2 billion from Bitcoin ETFs.

Min Jung, a researcher at Presto Research, said the ETF withdrawals suggest institutional investors are cutting back on near-term risk as hopes for Federal Reserve rate cuts fade, prompting many to shift funds into cash and safer assets.

Bitcoin is showing some signs of stabilizing and recovering today, trading just above $77,000 even though there is still downward pressure on the market.

For Bitcoin’s outlook to improve, the 10-year Treasury yield would likely need to settle in the 3.75% to 4.0% range.

That would reduce pressure on the U.S. dollar and help bring money back into riskier assets.

Analysts say the recent drop has shaken retail investor confidence, but they also believe Bitcoin’s underlying network fundamentals remain solid.

Traders are watching the $74,000 level closely as a key support point while they look for signs of a broader economic recovery.

For Bitcoin to move out of its current sideways, news-driven trading pattern, the market would likely need clear U.S. inflation data or a noticeable slowdown in Treasury yield movements to counter ongoing ETF selling from Wall Street.

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.