an inflation hedge

• Bitcoin Half-Lives and Price Changes

If you look at the data from 2010 to yesterday, the price of Bitcoin CAGR is 69%. It is a huge increase. Inflation of 8.4% is likely to be hedging.

Bitcoin Half-Lives and Price Changes
April 19, 2024 Half-Lives Due Date

1 month before graph tracking date half-life
btc_2012 = download_and_normalize_data(‘2012-10-28’) , 2012-11-28
btc_2016 = download_and_normalize_data(‘2016-07-09’) , 2016-06-09
btc_2020 = download_and_normalize_data(‘2020-05-11’) , 2020-05-11
btc_full_period = download_and_normalize_data(‘2010-07-18’,) 2024-04-19

2010-07-18 ~ 2024-03-27
CAGR: 69.36%

What is Bitcoin’s Half-Life?

Bitcoin’s halving refers to an event in which Bitcoin mining rewards are halved. The Bitcoin network halves the amount of rewards miners receive when they create new blocks and add them to the network about every four years (for every 210,000 blocks to be precise).

Bitcoin’s half-life has two important functions:
Deflation Mechanism: Bitcoin is designed so that only up to 21 million can exist. Half-lives play an important role in maintaining this digital scarcity, protecting the value by reducing the rate of supply of new Bitcoin over time.

Economic incentives: Initially, high mining rewards served as incentives to encourage miners to participate in the network. As this reward gradually diminishes through its half-life, the Bitcoin system shifts toward incentivizing miners over the long term through transaction fees.

Bitcoin’s half-life occurs automatically according to pre-set rules, which is an inherent part of its protocol. Half-life events receive a lot of attention among the Bitcoin community and are often thought to be related to increased volatility in Bitcoin prices. This is because, in the long run, the decline in Bitcoin’s supply can put upward pressure on prices relative to demand.

4 year price tracking log scale from half date
This is because the red curve was matched in the future due to the lack of historical data.