By Michael Scott
The Bitcoin halving event attracted attention, with crypto analysts predicting the impact on price movement. Glassnode reports that while the quadrennial event is a noticeable development on the supply side, the symbolic significance is unlikely to influence the price noticeably.
Glassnode acknowledges that the four days since the fourth halving offer a window where data amasses are critical to giving an early verdict on the effects on Bitcoin price.
Bitcoin Inflation Rate Trails Gold
The analyst observes that the supply inflation rate appears to have collapsed as projected. Glassnode reiterates that each Bitcoin block that firms mine every ten minutes yields 3.125 new BTC, a figure half of the former 6.25 BTC.
Glassnode observes that the pre-halving period saw 900 BTC daily production, leading to a 1.7% inflation rate. The present production translates to 450 BTC daily, taming the annual inflation to 0.85%.
The Glassnode reports that the 0.85% annual inflation rate places the network’s issuance rate below the 2.3% of Gold. The metric is critical given that Bitcoin is often compared to Gold.
Glassnode observes that Bitcoin bulls consider the token’s digital nature more divisible and portable, unlike precious metals. The divisibility advantages of Bitcoin as the modern-day exchange medium.
Halving brings a supply crunch to Bitcoin, making it more limited than precious metals. It implies, in theory, that value storage is better than battling inflation.
Halving Yet to Influence Bitcoin Price Movement
Analysts consider the halving to be irrelevant to Bitcoin’s price movement as its influence is not felt in the four-day window period.
The Tuesday report by Glassnode observes that issuance constitutes a fraction of the entire on-chain transfer, spot, and derivatives volume. The issuance translates to barely 0.1% of the aggregate capital flow and trade.
The on-chain analysis implies that the coins the halving took off the market are typically a drop within the ocean. The reduction is negligible to the existing coins trading hands and affects the price daily.
Glassnode analyst James Check profiled halving as a narrative game during the video presentation. Halving has hardly generated influence, unlike in previous cycles.
Glassnode compares the Bitcoin price pre-halving, where it rallied to send an all-time high in March. The report illustrates that the solid performance coincided with the US Securities and Exchange Commission (SEC) approving spot Bitcoin exchange-traded funds (ETFs.
Glassnode echoes the pronouncement by BlackRock chief Larry Fink, who repeatedly identified Bitcoin as a digital gold available for grabs by investors. While the pronouncements were before spot Bitcoin ETF approval, the lower inflation rate portrays Bitcoin as living up to the title.
Glassnode’s evaluation of price gains shows that Bitcoin’s price rallied 569% in the fourth epoch, a distant from the 1,336% witnessed in the third halving.
Mining Revenues Unaffected by Halving
The Glassnode illustrates that the declining BTC investment returns witnessed between the halvings arise from the expanded market size. Also, it requires scaled capital flows to stimulate movement.
The mining segment is emerging unscathed following the halving. Although the halving cut the revenues by half, the network hash rate has edged closer to all-time highs. The trend replicates the development witnessed in earlier halvings.
A review of the on-chain data reveals that miner earnings surged following the halving. The analysts attribute the boom to the newly unveiled Bitcoin token protocol, which was identified as Runes, for fueling the network transaction fees.
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