Bitcoin scarcity escalates as halving nears

Quick Take

Bitcoin’s halvings, as highlighted in Pantera’s recent newsletter, play a significant role in constricting the production of new Bitcoins. The first halving led to a 17% reduction in new supply as a percentage of outstanding Bitcoin, marking the onset of a trend.

This trend intensified in the 2016 halving; in terms of reduction in new supply as a percentage of the previous halving, it dropped by a third. In 2020, the reduction rate escalated to 43%. According to Pantera, the 2024 halving will result in an almost 50% cutback, chiefly due to the substantial number of Bitcoins already in circulation.