How Does the Halving of Bitcoin Impact the Market with an Inflation Rate Less Than Half of Gold’s?

According to a report by the cryptocurrency data analysis company Glassnode, the annual inflation rate of Bitcoin after its halving is significantly lower than that of gold. The fourth halving of Bitcoin was completed on the 20th of this month, and the block reward has been reduced from 6.25 BTC to 3.125 BTC. According to Glassnode’s report, the annual inflation rate of Bitcoin after halving is significantly lower than that of gold. The inflation rate of Bitcoin has dropped to 0.85%, much lower than the 2.3% inflation rate of gold. The average block interval on the Bitcoin network remains at around 10 minutes, and the block reward is also distributed every 10 minutes. It can be inferred that before the fourth halving, 900 Bitcoins could be generated daily, with an annual inflation rate of approximately 1.7%. After the halving event, 450 Bitcoins can be generated daily, and the annual inflation rate drops to approximately 0.85%, which is significantly lower than the 2.3% inflation rate of gold. Additionally, many people believe that Bitcoin’s divisibility and portability are unparalleled by other precious metals. Combined with the fact that Bitcoin’s inflation rate is significantly lower than that of gold after the fourth halving, this highlights its position as the most scarce asset and further strengthens its influence as “digital gold”. Glassnode analyst: Halving event is just a narrative game and not important. However, some analysts believe that the halving event has not had a significant impact on Bitcoin’s trading volume. Glassnode’s report states: “While the reduction in supply of new BTC is a clear fact, the impact on trading volume is not statistically significant.” Glassnode’s chief analyst, James Check, also tweeted on X platform: “The halving event is just a narrative game and not important.” However, of course, not every analyst holds the same view. After all, the decrease in the production of new BTC is a clear fact, and with the introduction of ETFs and the adoption by more financial institutions, more and more people around the world are bound to start recognizing this asset, and the halving narrative is expected to play a crucial role in their investment decisions. Another mention is that ViaBTC recently auctioned off the first “Genesis Coin” after the fourth halving of Bitcoin, and the current price has soared to 5.5 BTC ($353,394), an increase of 550 million times. However, before Ordinals was developed, we did not have the concept of grading Satoshi, and this artificial distinction may be one of the “narrative games” mentioned by James Check.