Crypto News

The economist: “may halving” will make bitcoin main competitor of the dollar

According to the expert of the American Institute for economic research Peter Earl, 2020, bitcoin will begin to more actively to strengthen its position.

The main event of the year will be the so-called may halving or reduction of awards to miners. If now the mining block reward is 12.5 BTC, then in may it will be reduced to 6.25 BTC.

In the expert community, many acknowledge the enormous role of Kalinga. Supporters of cryptocurrencies are confident that this event will trigger the rise of its value.

Now the average annual inflation rate for bitcoin is 3.7% -3.8 per cent. Daily miners produce about 1800 BTC (on average, mining is 144 block per day 12.5 BTC each). Accordingly, after halving the annual inflation rate in the network will amount to about 1.8%. This figure is below the target level of inflation of 2% set by the Federal reserve.

Earl notes that the fed and other Central banks over the last ten years did not change monetary policy. They continue to pour capital into the financial sector, believing that the stimulation of consumer demand will support the economy and keep inflation. The increase in base rates is an attempt to keep inflation or reduce it.

In this respect, the attractiveness of bitcoin as an asset will grow. The main advantage of coins is its limited number. Maintaining low inflation of bitcoin will lead to reconsider the relationship to BTC. After this first cryptocurrency will become a real rival to the dollar and other Fiat currencies.


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