May 1, 2025
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Expert Explains Why Saylor’s Billion-Dollar Bitcoin Buys Don’t Impact Price
In a recent explainer video, Joe Burnett from Unchained discusses why Strategy's acquisition of large amounts of Bitcoin does not significantly impact its spot price. Key points include:
- Strategy accumulates Bitcoin through a process that reallocates existing exposure rather than creating new demand.
- Burnett notes that as Bitcoin prices rise, older coins circulate, indicating seasoned holders are selling.
- Strategy employs a methodical buying approach, placing numerous small orders to avoid disturbing the market.
- When Strategy raises cash through equity, it converts that into Bitcoin, effectively shifting exposure without increasing overall demand.
- Similar dynamics occur with convertible-note programs where hedge funds may short-sell shares, impacting liquidity but not driving new capital into Bitcoin.
- Recent inflows from U.S. spot Bitcoin ETFs did not generate new demand, as funds shifted from other Bitcoin proxies like GBTC.
- True demand would require capital entering Bitcoin directly from external sources, such as treasury funds or real estate investments.
Burnett emphasizes that while Strategy’s approach is effective for accumulation, it lacks immediate market impact. He suggests that future Saylor-branded STRF funds could bring in new capital, potentially driving Bitcoin prices upward. As of now, Bitcoin trades at $94,971.
