Key Differences in Bitcoin’s Fourth Halving: Institutions, Supply Shortage, and Scarcity

Bitcoin’s fourth halving has just passed, and it is shaping up to be unlike any before. With the arrival of institutions, an existing supply shortage, and a minuscule inflation rate, Bitcoin is on track to enter a new era. Here are three reasons why this halving is different from the past three.

Firstly, the institutions have arrived. Unlike previous halvings where only retail investors were involved, institutions are now buying Bitcoin through spot Bitcoin ETFs. The demand for these funds has been remarkable, with purchases at rates 10 times greater than Bitcoin’s daily production. This influx of institutional investors could have a significant impact on Bitcoin’s future.

Secondly, an existing supply shortage led to an all-time high before the halving. Unlike previous halvings where there were more coins available on exchanges, the number of coins available for purchase has plummeted since the last halving in May 2020. This supply shortage, combined with the arrival of Bitcoin ETFs, led to Bitcoin hitting a new all-time high of $73,000 in mid-March, before the halving even occurred.

Lastly, Bitcoin’s inflation rate has fallen below 1%, officially making it scarcer than gold. With only 450 bitcoins being mined per day, Bitcoin’s inflation rate of 0.85% is lower than that of gold. This newfound scarcity could solidify Bitcoin’s role as a store of value and potentially surpass gold in terms of its inflation hedge capabilities.

Overall, the stars seem to be aligning for Bitcoin to surpass expectations once again. With the arrival of institutions, an existing supply shortage, and a minuscule inflation rate, this halving is shaping up to be unlike any other. Only time will tell the full impact of these changes, but Bitcoin is certainly on track to enter a new era.