Advertisement
Strategy’s ‘Synthetic Halving’ of Bitcoin Could Send Prices Soaring, Analyst Adam Livingston Warns
- Strategy is consistently buying up to 50%+ of new Bitcoin supply, rapidly tightening supply ahead of schedule, analyst Adam Livingston says.
- In the past six months, Strategy has acquired 379,800 BTC – nearly five times what the miners are producing daily.
- Livingston cautions that this aggressive buying could raise BTC purchasing and borrowing costs beyond what most people and institutions can afford.
Michael Saylor’s Strategy, formerly known as MicroStrategy, is set to become the first Bitcoin Superpower, according to analyst Adam Livingston. By consistently outbidding the market and absorbing an increasing share of newly mined BTC, Strategy is effectively engineering a ‘synthetic halving’ of the available supply.
Livingston notes that Strategy is consistently acquiring anywhere between 30% – 50+% of the new supply every month, reducing the available supply to the market faster than Bitcoin’s scheduled four-yearly halvings.
Related: Bitcoin Exchange Supply Hits Lowest Level Since 2019 Amid Soaring Institutional Demand
After Bitcoin’s official halving in April 2024, miner rewards were cut from 6.25 to 3.125 BTC per block, meaning that just 450 new BTC are mined per day. However, Strategy’s acquisitions have dramatically outpaced miner production. Over the past 182 days, Strategy has acquired 379,800 BTC, which averages around 2,087 BTC per day, according to Livingston.
“The effective supply curve for the rest of the world is suddenly functioning like there’s another halving already happening,” Livingston writes.
Rising Costs and Market Repercussions
As Bitcoin becomes increasingly scarce, the cost of acquiring it is expected to rise. Strategy’s aggressive accumulation could drive up borrowing and lending across the market. Livingston warns that the knock-on effects would impact institutions across the financial system. Mortgage lenders, universities, and startups could all be paying more simply because Saylor keeps capturing the float.
“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 says. If the trend continues, access to Bitcoin could become a premium service reserved only for major corporations and nation states.
Related: Saylor Snaps Up Bitcoin on the Dip as MetaPlanet’s Purchase Outstrips Strategy
Author
Rachel Lourdesamy
Rachel is a freelance writer based in Sydney with experience within financial services, marketing, and corporate communications in the APAC region. An avid reader and a graduate of the University of Sydney, she covers topics including business, finance and human interest.
