[NEWS] Bitcoin becomes the scarcest asset class ever, surpassing gold, according to Glassnode report

The fourth halving of Bitcoin (BTC) has reduced the annualized inflation rate of supply by 50% compared to previous periods, and has surpassed gold in terms of scarcity. Analysts at blockchain analysis company Glassnode reported this.

Glassnode said of Bitcoin's fourth halving, "It is an important milestone compared to gold." Furthermore, "For the first time in history, Bitcoin's steady-state issuance rate (0.83%) is lower than gold's (about 2.3%), marking a historic handover. Bitcoin has become the scarcest asset."

Due to the halving, the block reward for Bitcoin mining has decreased from 6.25 BTC to 3.125 BTC. Accordingly, the amount of Bitcoin issued per day is also about 450 BTC.

Since Bitcoin's block reward is halved every 210,000 blocks, the inflation rate is also halved approximately every four years. Glassnode noted that as a result, the new annualized inflation rate of Bitcoin supply is 0.85%, down from 1.7% in the previous period.

Looking at Bitcoin's price performance around the halving, Glassnode noted clear similarities between the 2015, 2018 and current cycles, all of which saw increases of around 200%-300%.

This point was also pointed out by Yassine Elmandjra, an analyst at ARK Investment, who noted that "since the halving, Bitcoin issuance rate has been below the growth in the long-term supply of gold."

Elmandjra argued that while gold's annual issuance rate is lower than the figures cited in Glassnode's report, it is still "much higher than the annual growth in Bitcoin supply after the halving due to block rewards."

Glassnode analysts also noted that the impact of the halving on Bitcoin price is diminishing. Furthermore, they noted that only a small fraction of the newly issued Bitcoin is used for transactions and transfers.

He also said that due to the wide variety of crypto assets (virtual currencies) and the expansion of the ecosystem, their influence is decreasing year by year throughout the cycle leading up to the halving.

Reference: Report
Image: Shutterstock

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