The arrival of the fourth halving on the Bitcoin blockchain has reinforced the narrative of scarcity in the cryptocurrency, which is becoming increasingly scarce than gold.
Bitcoin’s scarcity is a fundamental design feature of the market-leading cryptocurrency, with only 21 million units ever in existence. However, over time, the growth of its circulating supply has been slowing, giving Bitcoin a new meaning as an investment asset and store of value.
Two factors that have significantly influenced this shortage are HODLing and halvingThe first of these refers to the strategies implemented by many investors to maintain possession of their cryptocurrencies in the long term, while the halving is a scheduled event in the Bitcoin blockchain, so that approximately every 4 years, the issuance of new bitcoins is reduced by half.
With the last halving, which took place last April 20, Bitcoin has become a scarcer asset than gold.
An important milestone in the comparison of Bitcoin vs. gold
Glassnode, a leading blockchain intelligence firm, noted that the fourth Bitcoin halving event has marked a significant milestone in comparing the leading cryptocurrency to the precious metal. In its report, “The Fourth Halving”, the firm stressed that the annualized inflation rate of the Bitcoin supply has been reduced by 50% with the halving, with which the cryptocurrency has decisively surpassed gold, in terms of scarcity of issuance.
Source: Glassnode
Likewise, Ark Invest, one of the fund managers that launched a Bitcoin spot ETF in the United States in January, highlighted in a Press release that, after the Bitcoin block reward was halved, the issuance rate of the market-leading cryptocurrency fell below long-term gold supply growth.
With this, both firms underline Bitcoin’s role as a scarce asset, pushing the narrative of Bitcoin as “digital gold.”
The best performing asset in the last decade
Glassnode also highlighted Bitcoin’s role as one of the top investment assets over the past 11 years. In fact, in a post on X, the blockchain intelligence firm emphasized that Bitcoin has topped the list of best-performing assets for 8 years, leading the market from 2013 to 2023 with an annualized return of 124%.
So far in 2024, the price of Bitcoin has increased by 45%, according to data from CoinMarketCap. The leading cryptocurrency is trading at around $64.170 at the time of writing and maintains a market capitalization of over $1,26 trillion.
Continue reading: Bitcoin and Ethereum ETFs to debut in Hong Kong on April 30
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
