EMC Labs: The 4th Bitcoin halving accounts for 30% of the effective supply, triggering a significant supply deflation effect

ChainCatcher news, the cryptocurrency research institution EMC Labs stated today that although the absolute number of Bitcoin's fourth halving is less than previous halvings, its actual proportion of effective circulation may exceed 30%, which will trigger a significant supply deflation effect in the next four-year cycle.

According to EMC Labs' calculations, the absolute number of BTC in the fourth halving on April 20 is 164,000 coins/year, while the halving number four years ago was 328,000 coins/year. However, due to the reduction of BTC held by centralized exchanges, which determine BTC's short-term pricing power, from 3.06 million coins in the previous cycle to 2.29 million coins, the annual reduction accounts for 7% of short-term liquidity, which has not proportionally decreased compared to 10% in the previous cycle. The total reduction over four years accounts for 28% of short-term liquidity, and considering that the amount held by centralized exchanges will continue to decline, this figure may actually exceed 30%. Additionally, as the proportion of long-term holders has increased by 14% compared to four years ago, the combined effect of these two factors makes the supply deflation impact of this halving significant.

EMC Labs stated that this halving has reduced BTC's annual inflation rate to 0.8%, and they believe that the pattern of a super bull market occurring within 18 months after the halving will reappear.