CryptoQuant CEO: MicroStrategy's BTC buys absorb liquidity, don't raise prices

CryptoQuant CEO Ki Young Ju has assessed that MicroStrategy's Bitcoin purchases function more as a liquidity absorption mechanism than a catalyst for price increases. He noted that while BTC's realized cap has grown by $467 billion over the past two years, its price has actually fallen by 1%. Ki argued that even with tens of billions of dollars in inflows, the funds are merely facilitating transfers between existing holders without driving up the price. In an environment with high selling pressure, he analyzed that MicroStrategy's continued buying may only serve to defend a range-bound price rather than initiate an uptrend. Ki further suggested that MicroStrategy should halt its BTC acquisitions until it restores its cash reserves and capacity to pay dividends. He also recommended the company develop a model-based purchasing system and a systematic selling strategy in preparation for the next bull market. CryptoQuant had previously advised MicroStrategy yesterday to stop buying BTC and increase its cash holdings, though some critics have argued that this recommendation is several weeks too late.