Bitcoin Inflation Rate Falls Well Below Global Average Fiat Inflation Rate, Prompting Bullish Sentiment

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  • After the block reward halving, the Bitcoin inflation rate has declined to 1.5%

The Bitcoin inflation rate has fallen below the global average fiat inflation rate for the first time ever as can be seen in the below Tweet from economist Mati Greenspan. In-fact, the Bitcoin inflation rate is now only about half of the global fiat inflation rate.

The Bitcoin inflation rate is the number of new Bitcoins mined per year divided by the circulating supply at the beginning of the year, and until recently the Bitcoin inflation rate was over 3.6%. This meant Bitcoin had a higher inflation rate than major global fiat currencies.

However, the block halving has caused the Bitcoin inflation rate to decline as low as 1.5%, which is far lower than the global average fiat inflation rate, and even significantly lower than the USD inflation rate of 2-3%.

Thus, for the first time ever Bitcoin has a lower inflation rate than major global fiat currencies, and this is a bullish factor since this will cause Bitcoin to inexorably rise in value relative to fiat long term.

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