Key Takeaways
- Institutional demand, led by players like Strategy and ETFs, is rapidly absorbing available Bitcoin.
- Mike Novogratz believes Bitcoin is entering a potential supply squeeze driven by aggressive institutional buying.
- AI-driven hacks and quantum computing pose emerging threats.
Bitcoin could face a tightening supply dynamic as large institutional buyers accelerate accumulation, with Galaxy Digital CEO Mike Novogratz warning that current market demand, led by Michael Saylor’s Strategy, may outpace available supply.
Speaking on the All Things Markets podcast with Anthony ScaramucciNovogratz also echoed concerns about the rising use of AI in hacks, something that is becoming a key focus point for security in crypto.
Novogratz Flags Potential Bitcoin Supply Squeeze
Novogratz said retail participation in Bitcoin has “come back, period, end of story,” adding that flows are visible through exchange-traded products but even more pronounced in Strategy’s ongoing accumulation strategy.
“Michael Saylor is back, and he is selling stock, and he is selling perpetuals, and he is buying Bitcoin,” Novogratz said.
He noted that Strategy’s valuation premium relative to its Bitcoin holdings has expanded significantly, enabling the company to continue raising capital to purchase more of the cryptocurrency.
“What it means by now—you’re 130 times NAV… and so he can sell MicroStrategy and make money, create yield, as he says, for his investors,” Novogratz said.
He described the model as self-reinforcing, with investor demand for MicroStrategy shares effectively acting as a proxy for Bitcoin exposure.
“It’s a strategy that he has—he’s almost the only guy that actually has this strategy built in,” Novogratz said. “Michael has managed to create this cult of people that trust him and buy MicroStrategy as their Bitcoin proxy… and it’s working.”
The scale of purchases, however, is raising questions about market capacity.
“I mean, he bought $2.5 billion of Bitcoin… there’s not enough supply to eat up a billion a month—forget a billion a week,” Novogratz said.
It comes after Saylor announced last week Strategy had bought a further 34.164 Bitcoin, spending around $2.54 billion at an average price of $74,395 a token.
The purchase lifted the firm’s total holdings to 815,061 BTC, acquired for roughly $61.56 billion.
That places Strategy firmly as the second-largest known holder of Bitcoin, behind Nakamoto’s estimated stash of around 1.1 million.
Structural Bitcoin Supply Squeezes
Novogratz’s remarks come as broader market data increasingly point to a tightening Bitcoin supply backdrop.
Large-scale buyers such as Strategy and spot exchange-traded funds (ETFs) are absorbing a disproportionate share of newly available Bitcoin.
BlackRock’s IBIT alone holds more than 800,000 BTC, while total institutional and corporate treasury holdings have exceeded approximately 4 million BTC, representing over 18% of total supply.
This dynamic has led to periods where institutional demand significantly exceeds new issuance.
In some instances, ETF inflows have accounted for more than double the amount of Bitcoin mined, intensifying what analysts describe as a liquidity-driven supply squeeze.
Criticism Over Concentration and Bitcoin Supply
Critics point to the growing concentration of holdings among institutions and large wallets, noting that the top addresses now control a significant share of supply.
This raises concerns about reduced market liquidity and potential centralization pressures within what is designed to be a decentralized network.
Much of this criticism has been focused on Saylor.
However, as previously analysed by CCN’s education teamit was concluded that it would likely continue even without Strategy’s buying.
Bitcoin’s protocol-driven halving and the rise of institutional custody would still be removing large amounts of BTC from circulation.
“These structural factors would still drive a shortage on their own,” the education team wrote.
Quantum Computing Risks
Beyond supply dynamics, the discussion turned to longer-term risks for Bitcoin, including the potential threat of quantum computing to Bitcoin’s cryptographic foundations.
Novogratz acknowledged the concern but expressed confidence that the network would adapt.
“If you can use AI for offense, you can use it for defense. If we’re going to get quantum, we’re going to get quantum resistant. So the answer is yes,” he said.
He framed the issue primarily as one of coordination rather than technical feasibility.
“It’s just a coordination problem… it is rational for the core developers to implement the changes necessary to not have the thing get smoked,” Novogratz added.
Adding: “This is a real worry, but it’s a worry that will definitely get dealt with.”
Scaramucci echoed that view, emphasizing alignment within the Bitcoin ecosystem.
“The interests in the community are aligned to make these wallets quantum resistant, to protect the Satoshi wallet, and to do other things,” he said.
“Wherever the FUD is, we have an answer to address the FUD.”
It comes after Galaxy said in a report the quantum risk was “real but unevenly distributed.”
“Bitcoin’s design provides a degree of protection against quantum attacks because public keys are not exposed until coins are spent,” Galaxy Research said in the report.
“Most wallets today remain secure under current conditions, as funds are only at risk once public keys become visible on-chain.”
AI For Defense or Offense?
The conversation also highlighted the dual role of AI in future cybersecurity risks and protections for Bitcoin.
Novogratz suggested that advances in AI could accelerate both attack capabilities and defensive measures.
“If you can use AI for offense, you can use it for defense,” he said.
“I think Bitcoin community is not dumb, right? By definition, the whole premise of Bitcoin was based on people are going to make rational decisions,” he added.
Novograstz said it was “rational” for developers to implement necessary changes to protect from these threats.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt’s work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.