Tether, MicroStrategy bought billions, yet bitcoin keeps falling

With the price of bitcoin down 10% and global crypto markets losing half a trillion dollars since the start of the year, investors are questioning the mainstream narrative that institutional demand would drive up the price of bitcoin.
This year, giant companies like Tether, MicroStrategy, and Blackrock have been gobbling up tens of thousands of bitcoin, yet their efforts have not stopped its declining price.
Once upon a time, tether (USDT) supposedly pumped the price of bitcoin. In years past, according to researchers like John Griffin and Amin Shams, the minting of the world’s most popular, intermittently backed, stablecoin empowered market manipulators to induce demand for bitcoin. Despite the uncertainty of this theory, the idea of Tether’s power has remained popular.
Similarly, institutional demand was supposed to propel bitcoin to new heights.
“The institutions are coming” meme dominated discussions among many bitcoin investors over the years who predicted that trillions of dollars could somehow flow from capital management firms.
In addition, most bitcoin investors viewed Donald Trump’s US presidency as bullish.
“The Bitcoin President,” in the view of many bitcoin investors, would encourage mining, fund a Strategic Bitcoin Reserve with sovereign wealth, and remove regulatory and tax obstacles obstructing bitcoin investment. Tether’s asset manager at Cantor Fitzgerald, Howard Lutnick, even joined Trump’s administration as US Commerce Secretary.
Dreams come true on Inauguration Day
By January 20, 2025, all of these dreams had seemingly come true for anyone who had predicted a confluence of pro-bitcoin events.
Trump was president, USDT had reached a market capitalization in excess of $130 billion, US corporations were buying tens of billions of dollars, and bitcoin was at an all-time high above $108,000.
Since that Inauguration Day, a single company – Michael Saylor’s MicroStrategy (doing business as Strategy) – has acquired 78,185 additional bitcoin.
Read more: MicroStrategy bought 2.6% of circulating bitcoin at $67,458 apiece
Tether has minted over $5 billion worth of USDT and acquired over 8,100 bitcoin.
Trump has signed executive orders creating a Strategic Bitcoin Reserve and a Presidential Working Group to remove “restrictive regulations” and “unnecessary government interference” hindering bitcoin investment.
Trump’s children are even working in bitcoin mining.
All of these pro-bitcoin investments, however, have not stopped the decline in bitcoin’s price.
Bitcoin crashes despite Trump, Tether, MicroStrategy
Since Trump became president and institutions gobbled up tens of thousands of additional bitcoins, its price has actually declined consistently. Since January 20, bitcoin has lost more than one-fifth of its market capitalization.
The crash seems like a classic buy the rumor, sell the news effect.
Some people blamed macro environments. The S&P 500, for instance, has lost about 8% of its value since Inauguration Day. Bitcoin’s 21% drop over the same period, however, far outpaces that decline – although its more volatile, speculative qualities could explain its disproportionate outperformance.
More disappointingly, however, is the reminder that institutional buying or USDT mints are not enough to pump the price of bitcoin anymore.
With a market capitalization of over $1.6 trillion and over $29 billion of volume traded over the last 24 hours alone, the amount of marginal capital required to influence its price has increased far above prior years’ levels.
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