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 numbers indicate that post-halving, Bitcoin's health is in prime condition, which one analyst thinks is a positive sign for BTC in the long haul.
Bitcoin's On-Chain Metrics are Flourishing
As per the detailed review by Rafael Schultze-Kraft, a founder of Glassnode, a company versed in crypto data analytics, coins how Bitcoin is fundamentally more robust than ever.
Looking at pivotal metrics defining network growth, comparing this halving to the one on July 9, 2016, shows some revealing patterns:
- There's been a 234% rise in the total number of Bitcoin addresses.
- The daily active address figures, often seen as a paramount indicator of blockchain activity, have gone up by 59%.
- In parallel, the daily transactions have climbed by 44%, mirroring the uptrend in active addresses.
- With Bitcoin's hash rate surging by 6,837%, it's clear that miners are throwing their weight behind the crypto's future.
- The daily transfer value on the Bitcoin network has ballooned from $270 million to a staggering $2.1 billion.
- Addresses holding more than one Bitcoin have increased by 64%.
1/ #Bitcoin The fundamental strengths are at their pinnacle.
As the halving nears, it's insightful to step back and examine historical trends and how they measure up against previous halvings.
In brief: Network fundamentals are compelling; it's a bullish scenario long-term. $BTC
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— Rafael Schultze-Kraft (@n3ocortex) May 10, 2020
This compilation of data has led Rafael Schultze-Kraft to certain insights:
Certainly, Bitcoin is known for its market swings, and short-term price shifts can be dramatic. But when taking a broader view, Bitcoin's basic structure offers a promising future, painting a picture of growth that appeals to long-term investors.
Shortly after Glassnode rolled out a comprehensive study, details emerged showing Bitcoin's improved performance when its blockchain expands. The company pointed out, “Our analysis shows that robust on-chain fundamentals often go hand-in-hand with Bitcoin's successful performance,” pointing to their testing of a new aggregated insight named the Glassnode On-Chain BTC Index.
The broader economic stage is arguably favorable for Bitcoin now more than ever, analysts insist, setting it apart from earlier halvings or other periods in crypto history.
A Strong Macro Backdrop
Galaxy Digital's CEO, Mike Novogratz, who once worked at Goldman Sachs, noted that with central entities ramping up financial defense mechanisms in response to COVID-19, assets like Bitcoin and gold, with qualities akin to financial safe havens, should start diverging from equities.
As reported by Blockonomi previously, Novogratz believes there's a strong probability for both Bitcoin and gold to experience significant rallies much beyond previous peaks, hinting at valuations upwards of $20,000 for Bitcoin or more than $1,900 for gold.
Bitcoin's macroeconomic context is so tempting that recently, Paul Tudor Jones, a top hedge fund manager valued at over $5 billion,
has shown his endorsement for the cryptocurrency. In his piece titled “The Great Monetary Inflation,” Jones expressed how Bitcoin reflects gold's potential seen in the 1970s.
Gold, during that era, saw substantial gains due to rampant inflation and the end of the gold standard, a history lesson for the unaware.
Although Jones regards Bitcoin as less stable compared to fiat or gold, he likens it to the fastest option in a race.
Emphasizing this, he shared in a CNBC interview that 1-2% of his assets, approximating to $5 billion, are invested in Bitcoin, in addition to some BTC holdings in his managed fund.
Following cryptocurrency developments since 2013 as a writer, my articles and insights have featured in reputable sources like LongHash, NewsBTC, and Decrypt. Beyond writing, I'm involved with the EXODUS branch of HTC and own a modest Bitcoin stash. Reach out at [email protected].
