Bitcoin’s Issuance Rate Falls Below Gold’s After Halving Event
The recent halving event, which occurred on May 12, 2024, has significantly reduced Bitcoin’s issuance rate. This has resulted in the digital asset surpassing gold in terms of issuance scarcity for the first time in history.
The issuance rate is the rate at which new units of a currency are produced. In the case of Bitcoin, new coins are created as a reward for miners who verify and add blocks to the blockchain. After the halving event, the block reward was reduced from 6.25 BTC to 3.125 BTC per block, which has decreased the issuance rate to around 0.83%.
On the other hand, the annual gold issuance rate is estimated to be around 2.3%, according to Glassnode analysts. This means that Bitcoin’s issuance rate is now lower than that of gold, making it a scarcer asset.
Implications for Bitcoin
Bitcoin’s issuance rate is one of the key factors that determine its price. The lower the issuance rate, the more scarce Bitcoin becomes, and the higher its price tends to be. The halving event has significantly reduced Bitcoin’s issuance rate, which could lead to a further increase in its price in the long term.
Implications for Gold
The halving event could have a negative impact on the price of gold. As Bitcoin becomes more scarce, investors may be less inclined to hold gold as a store of value. This could lead to a decrease in the demand for gold, which could in turn lead to a decrease in its price.
Conclusion
The halving event has had a significant impact on the issuance rates of Bitcoin and gold. Bitcoin’s issuance rate is now lower than that of gold, which could make it more attractive to investors. The halving event could also have a negative impact on the price of gold.
Mehek