Thu 25 Apr 2024 ▪3min read ▪ byEddy S.
Bitcoin, the quintessential cryptocurrency, has recently reached a significant milestone. Following its fourth halving, its inflation rate is now lower than that of gold. Explore the reasons behind this development and its impact on the crypto market.
Bitcoin Inflation Rate VS Gold
The inflation rate of Bitcoin is a hot topic in the crypto sphere. After the fourth halving, the reward for mining each block decreased from 6.25 BTC to just 3.125 BTC. This drastic reduction has significantly slowed down the creation of new Bitcoins, from 900 to 450 BTC per day, resulting in an inflation rate of 0.85%.
In comparison, gold, often viewed as a store of value, has an annual inflation rate of about 2.3%. With Bitcoin’s current inflation rate at 0.85%, it becomes scarcer than gold. Its digital nature also offers greater divisibility and portability, positioning it as a modern medium of exchange. However, despite such a low inflation rate, will the repercussions be truly significant in the crypto market?
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Impact of This Inflation on the Crypto Market
The impact of this reduced inflation will be felt across the crypto market. Firstly, the increased scarcity of Bitcoin will strengthen its ability to hold value over time, without being eroded by inflation. Furthermore, investors and financial institutions will now pay closer attention to this cryptocurrency, seeing it as an asset for diversification. This will result in higher trading volumes and growing adoption.
However, it is crucial to note that despite its lower inflation rate, Bitcoin remains subject to significant volatility, which can impact its price. As the entire crypto market is often swayed by Bitcoin’s performance, such volatility could cause an unprecedented shock.
In summary, Bitcoin, with an inflation rate lower than that of gold, continues to redefine the financial landscape. Investors must remain vigilant about the volatility, but the rarity and increasing demand make Bitcoin an asset to keep a close eye on.
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Eddy S.
Le monde évolue et l'adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m'intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l'optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
