Bitcoin Annual Inflation Rate to Fall Almost 50% of World Average After Halving

After Bitcoin undergoes halving on May 12, the annual inflation rate of the cryptocurrency will be around half of the global average.

According to the April 26 tweet of crypto analyst Mati Greenspan, the annual inflation of Bitcoin (BTC) will decrease from 3.65% at the time of writing to 1.8% once the halving happens in 15 days. The global annual inflation rate for 2019 was 3.41%, and is roughly 3.56% for 2020.

Though many have noted that a low inflation rate would not necessarily attract new adopters to Bitcoin, the fact remains that after the halving the cryptocurrency will have a rate both lower than the global average and that of gold, estimated to be around 2.5% at the time of writing. Bitcoin has been more tightly correlated with the precious metal after the March 13 crash.

Hedge against inflation

Bitcoin could be used as a hedge against the type of inflation which may strike the United States after the “unlimited quantitative easing” measures introduced by the government in response to the financial crisis brought about by the COVID-19 pandemic. In some countries such as Venezuela and Zimbabwe the problem is already visible — the economies of these countries are experiencing hyperinflation.

If the world will see an increase in demand for Bitcoin — with both a fixed supply of coins and low inflation rate after the halving — the digital asset might enter a strong bullish trend in the near future.