After the most recent Bitcoin halving, its inflation rate is now lower than that of gold, meaning Bitcoin is currently the scarcest asset on record.
Bitcoin Halving Results In Inflation Rate Dropping To Just 0.83%
In their recent weekly update, Glassnote, a leading on-chain analysis firm, explored how the most recent Bitcoin halving has influenced the value of cryptocurrencies. The Bitcoin halving refers to a regular occurrence on the Bitcoin network where the reward for mining new blocks is reduced by half.
Every four years or so, these occurrences take place, with the most recent one happening not long ago. This marked the asset’s fourth “halving” event, resulting in a decrease in block rewards from 6.25 BTC to 3.125 BTC.
Miners are the sole recipients of new cryptocurrency when they successfully mine and add new blocks to the network. Regardless of the mining circumstances, these rewards are distributed consistently at a steady pace.
The idea of “Difficulty” is built into the mining process on the blockchain, allowing the network to automatically regulate the level of challenge miners face during their mining activities.
When miners increase their computational power, they complete tasks more quickly, resulting in faster production of new blocks. To maintain a consistent reward distribution, the network automatically increases the mining difficulty in the upcoming adjustment, thereby slowing down the miners and restoring the optimal block creation speed.
Due to the intricacies of Bitcoin’s production process, known as Halving, the supply of Bitcoin continues to expand at a steady rate as shown in the chart below. This chart illustrates how the daily issuance (the amount generated by miners) has evolved throughout Bitcoin’s history.
During Halvings, when the issuance of the asset remains relatively stable, its inflation rate stays consistent within those timeframes. Likewise, the inflation rate gets cut in half during Halving events when the issuance decreases.
With each new halving, Bitcoin’s inflation rate continues to decrease naturally. Previously, the annualized inflation rate was approximately 1.7%, but following the latest update, it has reduced to about 0.85% in the current period.
Due to this recent development, Bitcoin has surpassed Gold in terms of scarcity for the first time ever. Specifically, the report states that Bitcoin’s rate of new supply (0.83%) is now less than Gold’s (approximately 2.3%), signifying a significant shift in the title of the scarcest asset.
Here’s a simple way to rephrase the given text: The following chart illustrates the difference in inflation rates between Bitcoin and precious metals throughout the years.
BTC Price
Over the past few days, Bitcoin bounced back, but unfortunately, it took a step back in the previous day, dropping its value down to around $64,700 once more.
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2024-04-25 06:11