The Bitcoin block reward halving is nearly here.
The event is happening in around 4 hours from now , meaning that BTC’s inflation rate will be cut in half from 3.6% to 1.8% — inflation lower than that of most fiat currencies and purportedly lower than that of gold.
The activation of the halving reveals unprecedented health in Bitcoin's fundamentals, indicating a positive long-term outlook for BTC, according to analysts.
Surging On-Chain Metrics for Bitcoin
Insights from Rafael Schultze-Kraft — co-founder at Glassnode — reveal that Bitcoin's intrinsic qualities are more solid than ever.
By looking at vital on-chain data and comparing today's figures to those during the previous halving on July 9th, 2016, Schultze-Kraft identified growth patterns pointing towards market expansion, including several key indicators:
- There's been a 234% uptick in the total number of Bitcoin addresses.
- The count of active daily Bitcoin addresses, a reliable indicator of blockchain activity, has surged by 59%.
- Likewise, the number of daily transactions has grown by 44%, aligning with the increase in active addresses.
- The Bitcoin network's hash power, which measures the computational resources required to maintain the blockchain, has skyrocketed by 6,837%, reflecting strong miner support for the network's longevity.
- Daily transactional Bitcoin value has leaped from $270 million to an impressive $2.1 billion.
- Addresses holding over a single Bitcoin have gone up by 64%.
1/ #Bitcoin Fundamentally, the strength of Bitcoin is at its peak.
As the halving nears, it's crucial to take a broader look at the historical development of Bitcoin's on-chain fundamentals and how they compare to the last event.
TL;DR: The network's fundamental aspects are compelling and point to a bullish outlook in the long term. $BTC
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— Rafael Schultze-Kraft (@n3ocortex) May 10, 2020
This analysis led Rafael Schultze-Kraft to the conclusion:
While Bitcoin remains a volatile asset prone to short-term price fluctuations, its foundational metrics offer a clear, strong, and bullish outlook from a long-term perspective, appealing to investors with patience.
This conclusion came shortly after Glassnode released a comprehensive study indicating that per their review Bitcoin shows superior performance as the blockchain becomes more robust:
\"A solid historical connection exists between robust on-chain fundamentals and Bitcoin's success, and vice-versa,\" they stated, referencing their testing of a new comprehensive metric called the Glassnode On-Chain BTC Index.
A Strong Macro Backdrop
Moreover, analysts suggest that Bitcoin enjoys a favorable macroeconomic climate absent in previous years or during past halvings.
As reported by Blockonomi previously, Mike Novogratz, CEO of Galaxy Digital and former Goldman Sachs partner, argues that because central banks and fiscal policymakers are significantly expanding their balance sheets in response to the COVID-19 crisis, assets seen as safe havens could begin to diverge from traditional stocks.
Novogratz predicts that Bitcoin and gold have a good chance of reaching record highs previously unseen — exceeding $20,000 for Bitcoin and $1,900 for gold per ounce.
Bitcoin's macroeconomic context is so compelling that recently, Paul Tudor Jones — a top hedge fund manager with a $5 billion fortune — expressed his endorsement of Bitcoin.
In his paper titled ‘The Great Monetary Inflation’, Jones likened Bitcoin to gold in the '70s.
For those unaware, gold experienced a massive rally, doubling several times, fueled by rampant inflation and the gold standard's removal.
Jones acknowledged that although he sees Bitcoin as the riskiest store of value compared to fiat, gold, and other financial instruments, it is the \"fastest horse in the race.\"
Further affirming this view in a CNBC interview, Jones disclosed that he has allocated 1-2% of his $5 billion wealth into Bitcoin, alongside his fund's investment in BTC.
