The strategy (formerly the micro-strategy) continues its aggressive Bitcoin accumulation strategy (BTC) as a financial asset.
From August 2020 until today, the company led by Michael Saylor has launched a mechanism for aggressive Bitcoin purchases to such points. in fact, The main activity no longer passes through the software solutionbut due to the strategic accumulation of BTC.
As Nikou Asgari, the correspondent in the Digital Markets for the Financial Times, expressed: “All this relies on the value of the strategy and the value of all sorts of investments seen within it, as BTC prices continue to rise and upload.
And the impact of this strategy will create a variety of visions focused on the real role the company plays in the ecosystem. That strategy no longer functions as a traditional technology company. However, as an entity that directly affects the financial dynamics of BTC. For Adam Livingston, the author of the book Bitcoin era“The strategy pretends to be a company, but it’s a shadow central bank.”
The expert said: “Have you heard of astrophysics black holes? Strategies are financial. Recursive capital sinks that capture BTC debt with the grace of press and the soul of financial rebellion.”
Comparison with the central bank is because when Livingston issues priority measures or obligations to fund the constant purchase of assets, the company observes that central banks are expanding their balance in a similar way to how they print money to buy assets. As a result, the strategy has a direct impact on BTC prices. Because not only does it reduce the available offers, but Saylor guarantees it. The goal is to adopt a strategy hodl Long term. In other words, they are coins that are out-of-circulation.
This is because the supply of currency created by Nakamoto Atoshi is limited to 21 million units, and its broadcasts are cut every four years at an event known as half. This is a factor that directly affects medium and long-term prices.
As reported by Cryptonoticias, Livingston is interesting to halt as Livingston commented that its strategy was being deployed with recurring purchases of BTC funded through convertible bonds and retail offers in the secondary market.
This logic responds to a financial model known as «Reflective collateral flywel» (self-discomfortable side inertia steering wheel). As you can see in the image below, it is a cycle of feeding the company as it issues debt or actions to buy BTC. This reduces the offers available in the market (Immerse tradeable floats, or “absorbing negotiable flotation”) to raise the price of the asset (Higher BTC prices) and allow more capital to access lower rates (Low coupons), and thus promote new funding rounds (Greater salary increasess).
On that line, the specialist emphasizes: “Now, Bitcoin is going to go up because it’s not mathematically negotiable, not because of hype.
However, the difference between central banks is that the purpose is not macroeconomic data such as employment, inflation or other figures. The only thing that matters is the BTC price. “If that number doesn’t behave, the balance will take place. It’s an unregulated financial authority. It doesn’t reduce your savings, it accumulates them. That’s why strategy has more power than the governments around the world,” says Livingston.
This is because, according to its vision, the company has become the dominant actor in the market. In this way, it assumes a role similar to that of the financial authorities, but there are no restrictions that the central bank has.
And this is where this structural change occurs. It is no longer the market that determines the price of BTC. However, the company’s decision. Livingstone dice:
“The next historic maximum of BTC is not established in Coinbase graphics. It is set during a conversation in the hall of the Strategic Committee when someone asks. “Do you need this quarter?” The answer is “All.”
Adam Livingston, author of the book “The Bitcoin Age and Market Analyst.”
And then there’s another problem. Because the fact that it controls an important part of BTC in distribution It could affect the holdings of millions of people. This represents more power than many governments have about their coins today. “This is the end of the open market and the beginning of monopoly absorption. And it is run, calculated and calculated during the day by a man who has a profile picture on Twitter that appears to have seen God and has decided to buy more Satoshu,” Livingstone completes.
In his paper, the author suggests moving forward several years ago. The strategy has 1,000,000 BTC. In this regard, he states: «This is about 5% of the total offer. It is not an offer of circulation. total. These are not trading positions. They are not the funds cited in the Stock Market (ETF). This is refrigerated, national grade monetary weight collateral maintained by public companies operated as self-consistency liquidity sinks due to the constant expansion of preferred stock. Assume $120 million issued in preferred stock. Is it more than that? absolutely. And it becomes ».
This type of sustained accumulation backed by traditional financial instruments is supported as a positive behaviour and represents a deep structural change in the supply and demand dynamics of Bitcoin. Unlike ETFs that allow daily entries and output,Strategic strategies will permanently withdraw market liquidity.
In fact, this dynamic is similar to how bonds work around the Federal Reserve, but with significant differences, Livingston believes: Market mercy has been long, but in many ways it is » that shapes and guides it.
Through a model called “crossing the line” (in Spanish, “crossing the line”), you can see the impact of your strategy on the market. This dynamic shows that daily purchase of BTC by a company (absorption line) reaches a critical point when it exceeds the offer available in a market (distribution line) consisting of miner sales, ETF retreats and trader offerings. The strategy begins to set the marginal price for Bitcoin.
This “intersection” occurs when the purchase of a strategy exceeds the offer available in the market. That’s when demand driven by the strategy disproportionate its favorable market. From there, each new BTC will be purchased at a higher price, further strengthening the company’s dominant role in price formation.
In this regard, Livingston emphasizes: «When absorption consistently exceeded distribution, price discovery was over. The offer is structural, recursive and designed to not invert.»
To complete his paper, he uses a powerful ratio phor, reinforcing the idea that “all priority actions sold today are advances in supply shocks tomorrow.” They’re like thermometers that announce imminent BTC absorption.
Finally, he explains: «Its capital becomes BTC with cold storage. That BTC will not be sold. And the very existence of that offer distorts each model, invalidates each trading range, making the RSI graph just as useful as the 2012 MySpace action. This is a new financial axis formed in real time. It is not decentralized. That is not proof. Not controlled by DAO with a logo designed by a type of Bali called Chad. This is a precisely designed capital deployment, with the explicit intention of acquiring terminal percentages of the global financial infrastructure, and clearly intended to do so before institutions understand what they are seeing».
