Bitcoin Important Signal: Strategy Suspends Buying Frenzy, BTC Spot Demand Cools Down

The largest Bitcoin Whale on Wall Street, Strategy (formerly MicroStrategy), announced on Monday (July 7) that its Series A Perpetual Stride preferred stock (STRD) has entered the issuance phase with a market capitalization of $4.2 billion, following the company’s end of three consecutive months of Bitcoin accumulation last week. Currently, despite increased allocation to government bonds and continuous inflows into Bitcoin ETFs, the demand for Bitcoin Spot has declined.

According to a filing submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, Strategy has suspended its Bitcoin purchasing plan that began on April 14 for nearly three months, as the company did not announce any new acquisitions last week. During this period, Strategy spent nearly $7 billion to purchase over 69,000 Bitcoins, increasing its holdings to 597,325 Bitcoins, worth over $6.5 billion. This accounts for more than 2.8% of the total supply of 21 million Bitcoins.

The company also revealed that it has reached a sales agreement to issue up to $4.2 billion worth of STRD stock, intending to use the funds to resume Bitcoin purchases.

The acquisition plan recently disclosed by Strategy Company coincides with the ongoing inflow into Bitcoin ETFs. According to a report released by CoinShares on Monday, last week saw a net inflow of 790 million USD into Bitcoin ETFs. However, the report noted that this figure is a decrease from the average level of 1.5 billion USD over the past three weeks, which may indicate that demand could slow down as BTC prices approach historical highs.

Despite the steady inflow of funds into Bitcoin ETFs and strong purchases by asset management firms, Bitcoin spot demand has slowed in recent weeks. Shawn Young, chief analyst at a cryptocurrency exchange, stated that the decline in Bitcoin spot demand can be attributed to a slowdown in market sentiment, causing Bitcoin to be caught between bullish speculation and short-term uncertainty.

Young stated in the report: “This market dynamic has severely affected market sentiment.”

He emphasized that macroeconomic instability is the main reason for market fluctuations. He predicts that the upcoming “Cryptocurrency Week” in the United States could serve as a catalyst for renewed demand for Bitcoin and may trigger Bitcoin prices to reach new highs.

He added, “Market participants will seek favorable market advantages in anticipation of the new policy direction for digital assets.”

QCP analysts emphasize that despite eight previously dormant wallets suddenly becoming active on Saturday, transferring approximately $8.5 billion worth of Bitcoin, causing market concerns, strategic accumulations by companies like Metaplanet helped maintain the price of Bitcoin over the weekend. However, based on the dynamics of the Bitcoin options market, they expect a bullish trend in the third quarter.

“The trading volume remains near historical lows, but once it breaks through the resistance level of $110,000, it may trigger a new wave of volatile buying. Some larger institutions seem to be preparing for this,” wrote QCP analysts. “They continue to accumulate September $130,000 call options while firmly maintaining the September $115,000-$140,000 call spread, highlighting the structurally bullish outlook for the third quarter.”