Strategy, bought Bitcoin but why isn't it rising?...Pessimists urge "disclose reserves"

▲ Michael Saylor, Bitcoin (BTC)/AI generated image

A demand for Strategy, which has been buying large amounts of Bitcoin (BTC), to disclose proof of reserves for its holdings has been raised, sparking controversy over corporate transparency.

Coingape reported on May 5 (local time) that an anonymous Bitcoin critic, Pledditor, demanded Strategy disclose proof of reserves for its large Bitcoin holdings. Pledditor stated that while not directly accusing Strategy, led by Michael Saylor, the fact that the company has acquired approximately 3% of the total Bitcoin supply over about 18 months without a clear impact on its price raises reasonable questions.

Pledditor's remarks quickly spread among Bitcoin supporters. He pointed out that it is natural for market participants to demand proof of reserves, considering the immense amount of Bitcoin Strategy has bought. However, according to Coingape, Strategy has not yet issued a separate response to this demand.

This controversy coincided with Strategy's temporary halt in aggressive Bitcoin purchases. Saylor recently stated, "No purchases this week," stopping a four-week streak of additional Bitcoin acquisitions. The fact that the company did not buy more Bitcoin despite raising $82 million through an ATM stock offering drew market attention.

Strategy's Bitcoin holdings remain overwhelming. Coingape reported that the company holds over 818,000 BTC, with an average purchase price of around $75,537. Recent purchases amounted to 3,273 BTC, totaling $255 million, executed at an average price of $77,906. However, this volume was assessed to be significantly reduced compared to previous acquisitions.

Peter Schiff, a long-time Bitcoin critic, also targeted the impact of Strategy's purchases. Schiff argued that even if Strategy buys more Bitcoin, a price drop is inevitable, and that the company's goal of holding 5% of the total supply would not significantly affect the price.

Strategy has been regarded as a symbol of corporate Bitcoin purchase strategy, but with this demand for proof of reserves, market attention is shifting from the sheer volume of holdings to transparency issues. With questions about the limited price impact despite large-scale purchases and the recent halt in acquisitions, Strategy's future response has emerged as a crucial variable for Bitcoin investor sentiment.

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