Currently, traditional assets are continuously losing value due to overproduction and inflation. However, BTC, with its immutable scarcity and excellent monetary properties, is gradually becoming a stable beacon.
With the upcoming BTC halving, experts and market analysts are seeing BTC as the ultimate tool for long-term savings.
According to a new report, BTC’s unique attributes make it superior to traditional savings instruments. Joe Burnett, a researcher at Unchained, explains, “With the upcoming halving, the block reward for BTC will decrease from 6.25 BTC to 3.125 BTC, which will solidify BTC’s position as the primary medium of savings.”
Burnett describes the modern economic environment as an “innovation trap.” In this environment, rapid technological advancements and market competition lead to an oversupply of goods and services, ultimately resulting in a depreciation of asset value.
Burnett believes that in this scenario, storing a significant amount of wealth outside of BTC will become “increasingly difficult” due to the depreciation of traditional assets. He adds, “BTC will become a significant asset class in terms of global wealth, and all of this is happening while global wealth is rapidly growing due to accelerating innovation.”
“In a world of abundance, ultra-high productivity, and intense market competition, storing a significant amount of wealth outside of BTC will become increasingly difficult.”
Burnett also emphasizes that traditional assets, including fiat currencies, stocks, and real estate, are prone to depreciate over time. For example, the US dollar has significantly depreciated, falling 92.8% compared to basic consumer goods in the past five years.
This trend is also reflected in other asset classes, with a decline of over 94.8% in 20-year US Treasury bonds during the same period. Even precious metals like gold and silver have not been spared.
Despite being historically regarded as stable stores of value, the improvement in mining and production technology has led to an increase in supply, thereby reducing their value. Burnett explains, “Gold in the universe is virtually infinite, with an estimated value of around $771 trillion in the Earth’s oceans alone (about 70 times the current circulating supply).”
“The potential circulating supply of gold has no severe limitations, and as human productivity in mining and extracting gold continues to improve, the savings of gold holders will continuously depreciate.”
Burnett further adds, “These research findings indicate that the return on traditional investments is declining, and the importance of BTC is increasing.”
“The uniqueness of BTC makes it a distinct savings instrument, especially in a fiercely competitive, innovation-driven economy.”
Burnett points out that with the upcoming BTC halving, BTC’s supply inflation will decrease by 50%, reducing selling pressure and potentially leading to a significant price increase.
Similarly, Matthew Howells-Barby, the VP of Growth at Kraken, also notes that BTC halvings have historically catalyzed substantial price increases. After previous halving events, BTC prices have typically reached new all-time highs within a year.
Howells-Barby states in an interview, “BTC halvings have historically been the starting point for discovering new BTC prices. Within a year after the previous three halvings, BTC prices reached new all-time highs, dwarfing the price increase in the year before the halving.”
Howells-Barby further explains that the influx of spot BTC ETFs is likely to accelerate the appreciation of BTC beyond expectations, laying the foundation for another bull market cycle after the peak.
In the current bull market, BTC price predictions range from $100,000 to $120,000. Long-term predictions by analysts like Cathie Wood are even more optimistic, estimating BTC’s price to reach $1.48 million by 2030.
Therefore, the reasons for BTC being an excellent savings tool are convincing.
Howells-Barby concludes, “One of the most significant differences in this BTC investment cycle compared to previous ones is the investor composition.”
“Spot BTC ETFs have brought in more institutional capital, which theoretically should reduce price volatility over a longer period. I still believe there will be bear markets in the future, but the potential for an increase is greater.”
BTC’s advantage lies in its performance and underlying technology, ensuring that no more BTC will be created beyond the limit of 21 million. With the upcoming BTC halving, this becomes especially important, highlighting BTC’s ability to resist inflation and navigate economic uncertainty.
