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Key Takeaways
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Strategy now holds nearly 3% of all Bitcoin, raising concerns over decentralization.
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Sygnum warns this could deter central banks from adopting Bitcoin as a reserve asset.
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Leverage and concentration pose serious risks in volatile market conditions.
Bitcoin’s narrative as a decentralized, institutional-grade reserve asset is facing a new kind of test this time from within. While centralized governments and regulatory bodies have long been viewed as the primary risks to Bitcoin’s adoption, a new concern has emerged: the concentration of supply among large corporate holders.
Leading this shift is Strategy, formerly known as MicroStrategy, whose rapid and relentless acquisition of Bitcoin now accounts for nearly 3% of the total maximum supply.
While this strategy has fueled Bitcoin’s upward trajectory and drawn retail and institutional interest, a recent report from Swiss crypto bank Sygnum raises serious long-term concerns.
Strategy’s Bitcoin Playbook: Brilliant or Blinding?
Strategy’s most recent acquisition on 9th June, 2025, a purchase of 1,045 Bitcoin worth $110 million, has pushed its total holdings to 582,000 BTC, currently valued at over $63 billion. This number alone is staggering. But even more concerning is the growing centralization it represents.
According to Sygnum, Strategy’s current share of Bitcoin’s total supply is approaching a “problematic” threshold that could make the asset unattractive to future institutional and sovereign investors.
The problem is not just the size of the holding, but how it is accumulated. Strategy uses a high-beta, debt-leveraged model to expand its Bitcoin portfolio. This involves raising capital via convertible bonds and stock offerings, typically issued during Bitcoin rallies, when the company’s stock (MSTR) is trading at a premium.
The capital raised is then reinvested into more Bitcoin, creating a feedback loop where rising prices fuel further accumulation.
Concentration Risk: Undermining Decentralization
Bitcoin’s allure to institutions, especially those considering it as a reserve asset, lies largely in its decentralized, scarce, and liquid nature. When a single corporate entity begins to dominate the supply, it introduces counterparty risk, the very issue Bitcoin was created to neutralize.
Sygnum’s concern is that Strategy’s goal of eventually owning 5% of the Bitcoin supply could make the cryptocurrency unappealing to central banks and cautious institutional investors. These stakeholders are unlikely to adopt an asset that appears dominated by a single actor, especially one with a high-risk, leveraged financial model.
Moreover, if Strategy were ever forced to unwind its position, due to macroeconomic stress, stock devaluation, or debt obligations, the liquidity shock could destabilize Bitcoin’s price and ripple across global markets.
The Domino Effect: What Happens if the Model Breaks?
While Strategy’s bullish accumulation has so far boosted confidence in Bitcoin, its model is highly sensitive to market cycles. Here’s where the risks compound:
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Debt Overhang: If MSTR stock drops below the conversion thresholds of its outstanding notes, the company could lose its ability to raise capital efficiently.
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Forced Liquidations: In such scenarios, Strategy may be forced to sell Bitcoin to meet obligations, sending bearish signals to the market.
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Market Signaling: A large sell-off by one of Bitcoin’s biggest bulls would be interpreted as a loss of confidence and could trigger broader liquidation.
Sygnum analysts describe this risk in stark terms: if Strategy opts to sell Bitcoin to avoid issuing discounted equity, it would send a “very damaging signal to the market.” This would challenge Bitcoin’s narrative as a stable and maturing asset class suitable for long-term investment.
Rethinking Institutional Adoption
Sygnum’s report urges a more measured and diversified approach to Bitcoin adoption. Instead of a single company leveraging its balance sheet to accumulate a massive stake, the bank recommends smaller, risk-adjusted treasury allocations that better reflect Bitcoin’s role as an emerging store of value.
This would not only reduce systemic risks but also support a healthier, more decentralized market structure, one where Bitcoin remains accessible, liquid, and institutionally credible.
Also Read: BlackRock vs Strategy Inc: Which Bitcoin Proxy Stock Is Stronger?
Conclusion
Strategy’s bold accumulation of Bitcoin has undeniably contributed to the asset’s meteoric rise. It has amplified global awareness, validated Bitcoin as a treasury reserve option, and pushed the boundaries of corporate balance sheet strategy. However, as Sygnum’s analysis highlights, too much of a good thing may be a problem.
When a single entity amasses enough of a decentralized currency to influence market structure and investor behavior, the very foundations of decentralization begin to erode. If Bitcoin is to fulfill its long-term potential as a neutral, global reserve asset, its ownership must remain broadly distributed, and its adoption must be rooted in sustainable, risk-aware strategies.
In the coming years, the crypto industry and Strategy itself will need to navigate this delicate balance between ambition and concentration, innovation and overreach.
Also Read: Bitcoin Price Nears $110K: Can Institutional Demand Push It Higher?
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