Bitcoin halving and inflation

[hd49728]

As far as I can see you don't understand the basic principle of supply and demand. Bitcoin demand has been growing since its inception, with some ups and downs, but over the long term it has clearly grown. If demand remains constant or increases, which is what will continue to happen for the next few years, and supply decreases, the price increases.

Demand is higher in bull market than in bear market but bull market is shorter than bear market. The growth of Bitcoin is very solid if we look how it became stronger after past three bear markets. New all time highs are great but even in bear markets, the latter one shows bigger trading volume and Bitcoin communities did not stop growing even in bear market.

Halving reduces supply. Therefore, Bitcoiners expect the price to continue to rise, albeit with volatility because this is not a straight line.

Total supply does not change, halving does not change it. Halving only reduces future supply that is remaining bitcoins can be mined by miners. With less future supply and expected bigger demand when Bitcoin adoption will be bigger in future, people speculate that Bitcoin will continue to make its new all time highs.

[1715349651]

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[1715349651]

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[Mpamaegbu]

Bitcoin price is dependent on the supply and demand, with Bitcoin having, it means that the Bitcoin incoming supply is cut by half and in trading we all know that when the supply is lessen while the demand stay the same, it will make the price go up. Thus the value or price of Bitcoin will increase.

That's not what really happens. If it were, price won't ever slump after halving as we've seen it do after each ATH. If halving decreases supply, shouldn't it continue that way and price stays up? What drives Bitcoin price is sentiment. Most people believe that every halving year causes reward per block to decrease. There's FOMO around that event and so people get in the habit of longing to buy at all cost during the period. It's an expectation that increases buying pressure as people chase price up. This pressure soon dies off after halving.

Halving reduces supply.

Well, that will suffice while explaining it to a layman but in the practical reality that isn't what it's. It is the reward to block that reduces, not Bitcoin supply.

[Kelward]

A look at the history of halving, the first occurred in November 28, 2012. At the rate of 210, the second halving occurred in July 9, 2016. At the rate of 420, the third halving occurred in May 11, 2020. At the rate of 630. The fourth halving will occur in April 2024. At an estimated rate of 840. https://coincodex.com/article/22929/bitcoin-halving-dates/ .

I don't understand what is rate in your post, what is it? Would you mind to explain it, please?

he is speaking of the blockrate in thousands..
halvings happen at the:
210,000th block
420,000th block
630,000th block
840,000th block

as for his other mentions of the price.. the actual impact of the halving does not result in a ATH until a year after the halving

EG first market price 2010, first ATH 2011
first halving 2012, next ATH 2013
next halving 2016, next ATH 2017
next halving 2020, next ATH 2021
next halving 2024, expected next ATH 2025

Thanks for the clarification on this topic of discussion, I should have been more precise about mentioning blockrates, and of course ATH happens one year after halving, I take correction of that fact. This is the reason why this forum is the best place to discuss about bitcoin, it is also a place where new members are tutored about everything that they need to know about bitcoin.

[hd49728]

Halving reduces supply.

Well, that will suffice while explaining it to a layman but in the practical reality that isn't what it's. It is the reward to block that reduces, not Bitcoin supply.

Halvings reduce Bitcoin block rewards and Bitcoin future supply. Total supply is already 21 million bitcoins and will be gradually filled by new blocks till 2140. People who are new will look at block reward halves after a halving and less Future Bitcoin Supply to feel FOMO and hop on. It's FOMO effect from Bitcoin halvings even we all clearly know that total supply does not change and it is always 21 millions.

Future Bitcoin Supply

[Mauser]

Despite how halving increases the price of bitcoin to make it more profitable to investors, I'm wondering if it will not lead to devaluing of the currency in every four years? Will the effect of these not be inflation of bitcoin in every four years? I'm quit new in bitcoin, and I might be wrong, but I think that as halving continues to occur, bitcoin value might start to diminish gradually. And will it not negatively affect the purchasing power of bitcoin, in making payments for goods and services? I stand to be corrected.

The bitcoin halving event next year alone is not going to lead to large price jumps. We have seen it in the past where after the halvings, where prices didn't move that much or even went lower. The problem is that if all investors expect prices to jump at a certain date and plan to take profits afterwards, then the expectations of the market is not going to meet reality. Who would be buying all these coins at a high price when the majority of investors want to take profits? This will lead to a price drop as investors compete to get out of bitcoins, or to realisation that it's not a good time to sell and people will keep holding their coins. That is why I would recommend not to get expectations too high as it could only lead to headaches. You seem to already expects for prices to drop, but why should the purchasing power of bitcoin drop? All the investors who already hold bitcoins will see an increase in the value of their holdings long term. After the halving of bitcoins, the price has to increase eventually, because all the miners now get less profits and might not distribute any new coins. If prices are too low to cover the cost and revenues of the miners, they will just hold on to their coins until prices rise. That is why the long term trend of bitcoin will remain positive and it's just a matter of time for the price to move up again.

[panganib999]

The fact of the matter is that you're making this out as if it's bitcoin's problem when it was not.

Bitcoin has its own economy that is not controlled or in any way whatsoever affiliated to the dollar. We saw this firsthand when the whole world's on the shitbox and it's pumping like crazy despite every asset losing value back then. This means that devaluation will only happen if bitcoin's innate value became lesser. Which would happen only if people are to sell all their bitcoins and dump the cryptocurrency king for another. It's the only plausible way I can think of that would satisfy this "bitcoin will become devalued" narrative since there's no real way for you to really devalue something whose economy is shut off from the rest of the world.