Quick Take
Bitcoin’s inflation rate, currently sitting at about 1.750%, is expected to reduce by half to approximately 0.875% upon the next halving in April 2024. The upcoming reduction in Bitcoin’s annual increase of supply created an interesting point of comparison with Ethereum, which experienced significant changes in its own rate after transitioning to Proof-of-Stake (PoS) last year.
Following the introduction of the London Hard Fork and the Ethereum Improvement Proposal (EIP-1559) in August 2021, a transaction base fee was established and burned, effectively reducing the ETH supply. This burn mechanism has destroyed an estimated 4.4 million ETH thus far, exerting deflationary pressure on Ethereum.
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