It has been about four days since Bitcoin (BTC)’s fourth halving event occurred, and market watchers have accumulated enough data to make an early judgment on its impact.
One is that, as expected, Bitcoin’s supply inflation rate has collapsed. Each Bitcoin block that is mined approximately once every 10 minutes currently generates only 3.125 BTC. This is half of his previous 6.25 BTC block grant.
Before the halving, 900 BTC were generated every day, driving an inflation rate of 1.7%. The new figure roughly equates to 450 BTC per day, with an annual inflation rate of 0.85%. According to a new report from Glassnode, these metrics put the network’s supply issuance rate decisively below the 2.3% of gold, a historically significant asset with which Bitcoin is often compared.
According to Bitcoin bulls, the argument is that Bitcoin’s digital nature makes it more divisible and more portable than precious metals, which makes BTC advantageous as a modern medium of exchange. Thanks to the halving, Bitcoin’s supply is more limited than gold, which theoretically means that its value is better preserved over time, rather than inflating and disappearing.
However, some analysts believe that the halving is irrelevant when it comes to Bitcoin price fluctuations.
“The issuance amount is a fraction of the on-chain transfer, spot and derivatives volumes we see today, and currently represents less than 0.1% of the total capital moved and traded on any given day. ” Glassnode wrote onsite. -Chain analysis report on tuesday.
This means that the number of coins removed from the market by a halving is just a drop in the bucket compared to the number of existing coins that are traded every day and influence prices.in video presentation Last week, James Cech, principal analyst at Glassnode, said halving is a “narrative game” that “doesn’t really matter.”
Unlike previous halvings, the Bitcoin price managed to hit a new all-time high before the fourth halving ended, outperforming the launch of the US Bitcoin Spot ETF several months ago. It seems like it is. BlackRock’s Larry Fink repeatedly touted Bitcoin to investors as a form of “digital gold” before the fund launched.
However, when measuring price increases during the halving period, asset prices rose only 569% in the fourth period, compared to 1,336% in the third period. This indicates that BTC investment returns will decline during the halving, Glassnode suggests, which is due to the “expansion of market size and the scale of capital flows required to move the market.” “This is a natural result.”
The mining industry has also remained unscathed so far. Even though halvings significantly reduced miner revenues, Bitcoin’s network hashrate remained at or near all-time highs during all halvings, including the most recent one.
According to on-chain data, miner revenues actually surged after last week’s halving, thanks to the newly launched Bitcoin token protocol Rune pushing up network transaction fees.
Edited by Ryan Ozawa.
