After the halving eventYou will have a much lower inflation rate than the global average for fiat currencies.
Could Bitcoin’s annual inflation decline lead to an increase in demand? After its Halvin event, Bitcoin is becoming much scarcer. Your annual inflation rate will therefore be much lower than that of most central banks.
Bitcoin’s inflation rate will drop to 1.8%
At the time of writing, Bitcoin’s inflation rate is 3.65%. After halving, however, it will soon drop to only 1.8%. That is about half the world average inflation rate. In comparison, the world recorded an inflation rate of 3.41% in 2019.
As analyst Mati Greenspan (@MatiGreenspan) writes, this will naturally make Bitcoin more attractive.
“At this point, acceptance no longer has to grow to maintain the price,” he recently wrote in a tweet.
However, others were not so convinced. Low inflation does not make a commodity or asset attractive in itself, some would argue. It also depends on supply and demand. In other words, Bitcoin still has to be matured as an asset if it is to be a “reserve currency” or a central store of value.
Traditional investors are not currently looking to hedge against inflation. It is clear that we are now in the middle of a deflationary crisis. However, the macroeconomic indicators can change. As Mati Greenspan, founder of Quantum Economics, told BeInCrypto, high inflation tends to follow a deflationary spiral.
That’s how it usually works. The pendulum can swing fairly quickly at times, especially in the extreme conditions we see now. “
Does the halving event have a price?
The fact that Bitcoin is getting scarcer is definitely bullish in the long run. However, the short-term forecast is much more confusing.
It has been speculated that the halving is at full price. As BeInCrypto recently reported, Bitcoin’s price movements have recently differed from those of the last two halving events. Bitcoin’s RSI has never been so low before halving. It is currently unclear what this means for Bitcoin’s short-term price movements.
The current macroeconomic outlook also makes it particularly difficult to predict Bitcoin’s short-term forecast. However, Bitcoin’s low inflation rate should be more attractive when the dust settles.
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As a leading blockchain and fintech news company, BeInCrypto always strives to comply with strict editorial guidelines and the highest journalistic standards. With this in mind, we always encourage and encourage readers to do their own research into the information contained in this article. This article is intended as news and is for informational purposes only. The topic of the article and the information provided may have an impact on the value of a digital or cryptocurrency asset, but is never intended. Likewise, the content of the article and the information contained therein do not intend and do not intend to provide sufficient information for a financial or investment decision. This article is not expressly intended as financial advice, it is not financial advice and should not be construed as financial advice. The content and information in this article have not been prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making an investment decision. The author of this article may have any amount of Bitcoin, cryptocurrencies, other digital currencies, or financial instruments at the time of writing, including but not limited to those contained in the content of this article.