As the Bitcoin (BTC) halving approaches in the next four days, there is speculation among analysts about how this event will impact the cryptocurrency’s status as a store of value.
Currently, there are approximately 630 blocks left to be mined before the Bitcoin halving takes place, which is expected to happen around April 19. In March, the price of BTC reached an all-time high of over $73,000 after the United States Securities and Exchange Commission approved the listing and trading of spot Bitcoin exchange-traded funds in January. Since then, the price of the cryptocurrency has continued to show volatility.
Many crypto users and financial analysts argue that Bitcoin could serve as an effective hedge against inflation, as central banks, including the U.S. Federal Reserve, devalue fiat currencies by printing more money. In contrast, Bitcoin has a fixed supply of 21 million coins, with approximately 19.7 million already in circulation.
The halving, which will be the fourth in Bitcoin’s history, is set to reduce the block reward for miners from 6.25 BTC to 3.125 BTC. This event will cut Bitcoin’s inflation rate in half from around 1.7% to 0.85%, reducing the new supply of the cryptocurrency. If demand remains constant or increases, this could potentially cause the price of Bitcoin to rise.
Previous BTC halving events have historically resulted in price increases. Many users in the U.S. already use Bitcoin as a hedge against the inflation of the dollar, and there is potential for more users in countries experiencing hyperinflation, such as Argentina, to turn to Bitcoin as well.
“It’s becoming increasingly evident that Bitcoin and digital assets provide more than just a means of payment for users,” said Marcos Nunes, CEO of Gnosis Pay. “Instead, these assets serve as a lifeline for millions of people around the world who live in countries with economic turmoil and hyperinflation.”
The way countries regulate and adopt Bitcoin can impact its price. Analysts closely monitor the regulatory approach of the United States at both the state and federal levels, as the country is responsible for approximately one-third of all Bitcoin mining.
Following the halving, the greater scarcity of Bitcoin is likely to make its store of value proposition more appealing to crypto users. There is also speculation about how Bitcoin will compare to gold after the event. Gold has been considered a more traditional store of value for traders who may not be interested in cryptocurrencies, but this dynamic could change.
Bitcoin’s price volatility is expected to continue after the halving, but its inflation rate is projected to drop below that of gold once again. This is because gold miners will increase the gold supply at a higher rate compared to crypto miners increasing the Bitcoin supply. Gold enthusiast Peter Schiff has not yet addressed this issue directly on social media, instead focusing on the price of Bitcoin in his recent posts.
Based on the upcoming halving and historical data, it is estimated that the final BTC block reward will occur in the year 2140, over 100 years from now. At that point, according to the Bitcoin white paper, miners will rely solely on transaction fees as the incentive, with all 21 million coins already mined.
Source: Sinz 21st.Capital
The Bitcoin halving event is approaching, and it is expected to impact the cryptocurrency’s status as a store of value. With approximately 630 blocks left to be mined before the halving, which is set to occur around April 19, there is anticipation in the crypto space. In March, BTC reached an all-time high of over $73,000 following the approval of spot Bitcoin exchange-traded funds by the United States Securities and Exchange Commission. However, the price of Bitcoin has continued to show volatility.
Many financial analysts and crypto users believe that Bitcoin can serve as a hedge against inflation. As central banks, including the U.S. Federal Reserve, devalue fiat currencies through money printing, Bitcoin’s fixed supply of 21 million coins makes it an attractive option. Currently, around 19.7 million BTC have already been mined.
The halving, which will be Bitcoin’s fourth, will reduce the block reward for miners from 6.25 BTC to 3.125 BTC. This will effectively cut Bitcoin’s inflation rate in half from 1.7% to 0.85%. The decrease in the new supply of the cryptocurrency could potentially lead to a rise in its price, assuming demand remains constant or increases.
Historically, BTC halving events have resulted in price increases. Many users in the U.S. already use Bitcoin as a hedge against the inflation of the dollar, and there is potential for more users in countries with hyperinflation, such as Argentina, to turn to Bitcoin as well.
“It’s becoming increasingly evident that Bitcoin and digital assets provide more than just a means of payment for users,” said Marcos Nunes, CEO of Gnosis Pay. “Instead, these assets serve as a lifeline for millions of people around the world who live in countries with economic turmoil and hyperinflation.”
The regulation and adoption of Bitcoin by different countries can also impact its price. Analysts closely monitor the regulatory approach of the United States, as the country accounts for approximately one-third of all Bitcoin mining activities.
Following the halving, the increased scarcity of Bitcoin is expected to make it a more appealing store of value for crypto users. The comparison between Bitcoin and gold is also being considered. While gold has traditionally been seen as a store of value for traders who are not necessarily interested in cryptocurrencies, this could change with the halving.
Bitcoin’s price volatility is likely to continue after the halving, but its inflation rate is expected to drop below that of gold. This is because gold miners will increase the gold supply at a higher rate compared to crypto miners increasing the Bitcoin supply. Despite this, gold enthusiast Peter Schiff has not yet directly addressed this issue on social media, focusing instead on the price of Bitcoin.
Based on historical data and the upcoming halving, it is estimated that the last BTC block reward will occur in the year 2140, more than 100 years from now. At that point, miners will rely solely on transaction fees as the incentive, as all 21 million coins will have been mined.