Bitcoin Still Has Room to Grow, Outpaces Gold in Inflation Rate: Capriole Investments' Edwards
Summary:
Charles Edwards, Capriole Investments founder, asserts that Bitcoin and other cryptocurrencies still have substantial room for growth in the current bull market. Several chain metrics, Bitcoin's superior inflation rate to gold after the latest halving, and the ongoing devaluation of traditional currencies due to inflation support his theory. However, research company Glassnode advises caution, stating that past halving performances may not necessarily dictate future events due to the evolving market landscape. Independent research is urged before making any investment decisions.
Charles Edwards, Capriole Investments founder, believes that Bitcoin and other digital currencies still have significantly more room for growth in this current bull market. His confidence is based on several on-chain metrics and emphasized in his recent newsletter. Edwards points to factors such as transaction fees from the new Runes introduction and metrics post-Bitcoin halving, leading to expectations of increased baseline Bitcoin prices.
Following the fourth Bitcoin halving, the cryptocurrency's supply growth rate experienced a 50% reduction. This trend surpassed the inflation rate of gold, leading Edwards to designate Bitcoin as superior to gold. Inflation's long history and its devaluation of currencies position Bitcoin as an effective tool for preserving wealth in the long run.
In 2023, gold's inflation rate went up by more than 50%, reaching a 3% p.a. This inflation is more than four times that of Bitcoin, emphasizing the cryptocurrency as the ultimate store of value in comparison to gold.
Market research company, Glassnode, confirmed this sentiment. They stated that Bitcoin's halving led to its overtaking of gold in terms of issuance scarcity. The steady-state issuance rate of 0.83% is less than gold's approximately 2.3%, marking a historic shift in resource scarcity.
Arthur Hayes, an American businessperson and ex-CEO of BitMEX, voiced his opinion, saying that as governments continue to print money to counteract their debts, their currencies will decline against Bitcoin, maintaining Bitcoin's position as the "hardest money ever."
Edwards maintains three potential post-halving outcomes for Bitcoin. The first predicts a dramatic increase in Bitcoin price. The second foresees approximately 15% of Bitcoin miners shutting their operations. The third predicts transaction fees maintaining a level higher than the average. He expects a combination of the three scenarios to unfold.
However, Glassnode advises its readers to measure their expectations against historical precedents. The differing results of Bitcoin performance over various halving epochs, due to the increasing market size and associated capital flows, makes it challenging to use past performance as a guide for current circumstances.
While not entirely dismissing the potential of exponential growth for Bitcoin's price, Glassnode suggests that outcomes may not precisely mirror previous events. On a different note, Hayes believes that Bitcoin's path from its current status to $1 million may be easier than its journey from zero, prompted by the sovereign debt bubble's potential burst. It's important to note that this information should not be construed as investment advice or recommendations as every investment and trading move involves its unique set of risks. Therefore, independent research is highly recommended before making decisions.
Published At
4/25/2024 12:26:03 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.