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

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

Controversy over corporate transparency has erupted as Strategy, which has been massively acquiring Bitcoin (BTC), is being urged to disclose proof of reserves for its holdings.

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 acquired approximately 3% of Bitcoin's total supply over about a year and a half yet failed to significantly impact 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 Strategy's massive Bitcoin acquisitions. However, according to CoinGape, Strategy has not yet responded to this demand.

This controversy coincides 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 market took note of the company not making further Bitcoin purchases despite raising $82 million through an ATM stock offering.

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

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

Strategy has been regarded as a symbol of corporate Bitcoin acquisition strategy, but this demand for proof of reserves has shifted market attention from the sheer volume of holdings to transparency issues. The combination of questions about the limited price impact despite massive purchases and the recent halt in acquisitions has made Strategy's future response a crucial variable for Bitcoin investment sentiment.

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