From the scarcity of gold, everyone realized the value of BTC halving, but only 5% of the them seized the opportunity
Can BTC surpass gold?
Gold has always been a popular asset, because of its rarity. Collecting antiques in the prosperous times, buying gold in the turbulent times, I believe that everyone has such a consensus. With the development of BTC, more and more people begin to compare the two. BTC has also been dubbed “digital gold”.
1. Halving increases scarcity
In May this year, BTC is about to halve for the third time. With the halving of BTC, the position of “digital gold” will be further consolidated. BTC halving is an event that ensures its reasonable scarcity. Google trend data shows that the searches for “BTC halving” doubled in January, which shows that everyone is paying attention to this major event affecting the BTC market.
The total supply of BTC has been limited at the beginning of the design. Miners will get a new BTC as a reward for each transaction block they dig. BTC has been halved twice since the initial 50 BTC awards per block. At present, the award for each block dug out is 12.5 BTC.
After halving in May 2020, the mining incentive for each new block (a new block is dug up about every 10 minutes) will be reduced to 6.25 BTC. This will reduce BTC supply distribution rate to about 1.7% per year.
Stock-to-flow (S2F) is a measure of the new supply exceeding the total supply. After the BTC is halved, the scarcity of the BTC S2F will be equal to that of gold.
Coinbase points out:
The S2F of gold is higher than that of any other metal commodity, and BTC will soon catch up with gold.
Combined with the first two halving analysis of BTC, it has successfully set a new high in price history after each halving.
2. The property of risk aversion eventually emerges
No matter in the trade friction between China and the United States, the geopolitical situation of the United States and Iran, or in the brexit of the UK, BTC price has increased to a certain extent. Especially in the national extreme events, BTC is preferred by investors to gold for risk aversion.
3. Long-term value shows resilience
The resilience shown by long-term value is the reason why BTC can rise after a series of steep declines.
Looking back on the historical trend of BTC price in 10 years, it always shows a spiral upward trend, and its bottom is getting higher and higher. After the bull bear exchange, the price will reach a new level, so that the market can regain confidence. In the long run, the risk is controllable.
We all know that the output of BTC is halved every four years, and the halving market will make the miners reluctant to sell, which will drive a wave of market. Even if the miners do not expand BTC computing power in four years, the mining cost of BTC will double every four years, but the assumption is not true, because the computing power of BTC will expand several times every four years, so it is supported that BTC price will increase several times every four years.
Let’s assume that the BTC holders are BTC believers, and the number of holders of BTC doubles every four years. Driven by exponential function, this consensus group will soon surpass the number of gold holders.
At the same time, with the improvement mining computing power of BTC , miners, mining pools, mining machine manufacturers, etc. have gradually formed a complete upstream and downstream industrial chain. Although there are periodic fluctuations in digital assets, the mining industry has formed an industrial base, and the miners, mining pools etc. involved in it can not simply withdraw, which makes the industry have a certain toughness, so the possibility of being sold off in large quantities is relatively reduced.
To sum up, the scarcity of BTC is prominent after halving, and digital gold is worthy of the name. More and more people began to hoard coins to wait for the arrival of the halving. Glassnode official twitter pointed out that in 2020, the number of BTC hoards is increasing dramatically. At present, at least 40% of BTC in the market has not experienced transaction transfer for two years.
RRMINE found that from the scarcity of gold, everyone realized the value of BTC halving, but only 5% of the them was able to access the value of BTC, even thought 100% of them saw the scarcity of BTC which be similar to gold. Although the market is bullish for a long time, it is difficult to predict the fluctuation of the currency price, and it is difficult for ordinary people to grasp the cycle of rise and fall. For those who want to own BTC at this time, ordering computing power contracts should be the best choice. By mining with a computing power contract, they can obtain BTC at a lower cost, and obtain an excess return in the rising market, and effectively avoid the risk of direct currency fluctuations.
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This article is edited by RRMINE.MKT. The information in this article is compiled and sorted out by the team from both domestic and foreign information. It is the independent opinion of the original author and does not represent the standpoint of RRMINE.
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