Bitcoin is deflationary

[peter0425]

We know that bitcoin is a hedge against inflation due to its fixed supply which determines its value to never diminish over time since its supply will continue to decrease as demand keeps increasing. But in recent time, this may not be the only reason why bitcoin is deflationary. According to Adam Livingston, miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day. The half a million bitcoins that Strategy owns will be held with no intent of selling any time soon. This almost guarantees around a -2% annual deflation rate.

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

[Dunamisx]

Though this is not the very first time this would be discussed here on the forum, the same reason is part of the do called conditions that warrants many to adopt the use of bitcoin than fiat in their financial economy, why because inflation has dealt badly on them and they would rather choose to have an alternative than left without a choice in handling financial economy, Bitcoin has everything it requires for us to remained convinced of its relevance and adoption, if we read more about the network.

[suzanne5223]

Bitcoin is more than just a deflationary to inflation, and I see it as the future money pace setter because it's bringing the attention of the world leaders to the use of blockchain, and the concept of digital assets.

Having said that, we have already seen a lot of investment organizations following the footsteps of MicroStrategy, which makes a lot of Bitcoin enthusiasts happy because soon BTC will have the privilege to become a mainstream payment method.

Nevertheless, we shouldn't overlook the disadvantages involved, which could only be the organization dumping its holdings just to make a profit.

[SquirrelJulietGarden]

According to Adam Livingston, miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day.

More bitcoins will be created by mining with time so it's not evidence for you and anyone to say Bitcoin is deflationary with time at any rate even -2% annually.

Bitcoin is truly inflationary but Satoshi Nakamoto programmed Bitcoin protocol and designed Bitcoin inflationary rate is halved every 210,000 blocks. With an average time of Bitcoin block is 10 minutes, 210,000 blocks would last for about 4 years.

All bitcoins in total supply will be mined until a year of 2140 and before all nearly 21 million bitcoins mined by Bitcoin miners, Bitcoin will never be inflationary. We only can call Bitcoin as inflationary after 2140 year, and after 21 million bitcoins appeared.

How is the 21 millions Bitcoin cap defined and enforced?

[Japinat]

Bitcoin was designed for that purpose, and you can already tell by its fixed supply.

Take inflation for example, look at Venezuela. They keep printing money, but the value keeps dropping. Even the U.S. isn’t exempt from this.

With Bitcoin, that doesn’t happen. It doesn’t just “print” more coins like central banks do. That’s why many see it as a hedge against inflation.
And as long as there’s demand especially with institutional investors getting in, that just makes Bitcoin’s future even stronger.

Trust bitcoin, doubt the government.

[thecodebear]

OP, that has nothing to do with deflation. Strategy is just a buyer in the market, a larger buyer, but no different than any other buyer. You don't define if an asset is deflationary or not buy how many people are buying or selling, otherwise it's deflationary/inflationary status would change every day based on whether there was more buying or selling.

And the 450 newly mined bitcoins daily is nothing compared to the volumes that are traded daily.

So the whole thing is a pretty meaningless statement.

[Churchillvv]

If you define deflation by people's acquisition of bitcoin like MS then you're absolutely nothing close to understanding bitcoin deflation as no institution or whale holding determines how much scarce bitcoin is, imaging 6 years ago bitcoin was deflationary asset, when micro strategy hasn't acquired any bitcoin. Yet bitcoin was doing absolutely well.

Micro strategy selling their holdings is only going to make a temporary crash in the market or effect on the market yet their are people ready to buy as much as he holds once he sells.

Now looking at the biggest Hodling in the nearest future MS might not be the biggest holder anymore as we already have a marginalized company called 21 capital which is bitcoin specifically focused more than micro strategy, they are going to hold more hence even if micro strategy sold today other companies ready to hold will buy it up.

[SquirrelJulietGarden]

If you define deflation by people's acquisition of bitcoin like MS then you're absolutely nothing close to understanding bitcoin deflation as no institution or whale holding determines how much scarce bitcoin is, imaging 6 years ago bitcoin was deflationary asset, when micro strategy hasn't acquired any bitcoin. Yet bitcoin was doing absolutely well.

Bitcoin is not deflationary, in 2009, 6 years ago like your example or now and in future years till 2140. We also can not say many bitcoins lost and some reports say it is about 3 or 4 million bitcoins, but those lost bitcoins don't make Bitcoin deflationary.

We don't say fiat currencies are deflationary because people lost their fiat currency by any reason, so we can not say it with Bitcoin because there are lost bitcoins.

Bitcoin is better than fiat currencies because Bitcoin has a cap for its total supply while fiat currencies don't have any cap and this makes Bitcoin very attractive with people who want to find an asset that can help them to save their money against fiat currency inflation.

[dumpsterhawk]

Nevertheless, we shouldn't overlook the disadvantages involved, which could only be the organization dumping its holdings just to make a profit.

That's not a disadvantage, it is part of the process.

More bitcoins will be created by mining with time so it's not evidence for you and anyone to say Bitcoin is deflationary with time at any rate even -2% annually.

Bitcoin is truly inflationary but Satoshi Nakamoto programmed Bitcoin protocol and designed Bitcoin inflationary rate is halved every 210,000 blocks. With an average time of Bitcoin block is 10 minutes, 210,000 blocks would last for about 4 years.

What people usually try to say with this is that the rate of inflation or generation of Bitcoins is deflationary, so this is correct.

We only can call Bitcoin as inflationary after 2140 year, and after 21 million bitcoins appeared.

Wrong. It will not have a single new satoshi generated, and because of that it can't be inflationary.

[AVE5]

My intake to this is that when we talk about deflation in bitcoin price, let's also put it forward that it also has inflation which sums it a volatile currency while it limited supplies of the 21 million bitcoins facilitates it potential hedge for economy inflation. Though that's only acted as this valuable hedge when the community users and investors are buying continually without a sudden plan to sell too early which of course as it stance, 19.3 million bitcoins has been mined due to demands rates. There then makes bitcoin a good hedge to store values.

Even microstrategy would tend to sell their assets, they immediate market value will still give the market a good shape for new entries. We just need to believe that those institution companies invested in bitcoin will sell their assets somedays because they're not just invested on bitcoin to serve as hedge for investors like us with little amount of holdings. Perhaps they'd sell somedays but sure would reinvest because money in the savings isn't ever enough to rely on the long term future.
So, let's expect them to sell in the future but wouldn't get an end of bitcoin being a good store of digital assets.

[Upgrade00]

I would not factor in the purchase by a business as a feature of Bitcoin. There is no guarantee what they will do with their bitcoins or if they will hold long term.

Bitcoin is truly inflationary but Satoshi Nakamoto programmed Bitcoin protocol and designed Bitcoin inflationary rate is halved every 210,000 blocks.

You can make an argument for whether or not Bitcoin is deflationary, but it definitely is not inflationary as you suggest. Having a supply at all foes not mean an asset is prone to inflation.
The qualities of having a supply cap, steadily decreasing supply injections and the increase in fiat value against the supply will suggest that Bitcoin is deflationary.

[tread93]

We know that bitcoin is a hedge against inflation due to its fixed supply which determines its value to never diminish over time since its supply will continue to decrease as demand keeps increasing. But in recent time, this may not be the only reason why bitcoin is deflationary. According to Adam Livingston, miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day. The half a million bitcoins that Strategy owns will be held with no intent of selling any time soon. This almost guarantees around a -2% annual deflation rate.

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

Bitcoin will be looked back on the same way early investors got in on the dot com boom. This is history in the making and honestly the price is going to flip gold and go over 1 million i have no doubt

[headingnorth]

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

This is false.

As a publicly traded company Microstrategy can't just decide to sell all their bitcoin anytime it wants,
anymore than Amazon or Google can one day decide to sell all their company shares.
That's not how it works. The bitcoin belongs to the shareholders and its the shareholders each who decide
when or if to sell their own individual stake, or shares in the company.

[Rustam Meraj]

This is false.

As a publicly traded company Microstrategy can't just decide to sell all their bitcoin anytime it wants,
anymore than Amazon or Google can one day decide to sell all their company shares.
That's not how it works. The bitcoin belongs to the shareholders and its the shareholders each who decide
when or if to sell their own individual stake, or shares in the company.

You are right MicroStrategy which has its stock traded on public market can not just decide to sell all its Bitcoin whenever it feels to sell. Bitcoin that MicroStrategy owns belongs to company itself not directly to people who own shares in company. However how much that Bitcoin is worth affects how much whole company is worth and that affects how much shareholders stock is worth. Shareholders can choose to sell their own stock in MicroStrategy if they want but they do not get to decide when or if company sells its Bitcoin. If MicroStrategy wanted to sell much of its Bitcoin they would need to tell shareholders and that could make people want to buy sell or keep their stock.

[fuguebtc]

Having said that, we have already seen a lot of investment organizations following the footsteps of MicroStrategy, which makes a lot of Bitcoin enthusiasts happy because soon BTC will have the privilege to become a mainstream payment method.

Nevertheless, we shouldn't overlook the disadvantages involved, which could only be the organization dumping its holdings just to make a profit.

Organizations like Strategy invest in bitcoin and many others are also preparing to invest in bitcoin, which means they have accepted using bitcoin as an asset, a commodity to make profits. Meanwhile, bitcoin investors are excited about this because people expect it to push the price of bitcoin higher, not because they expect bitcoin to have a chance to become a payment method. Retail investors are just like institutions, what they care about is the profit from bitcoin.

On the contrary, I don't see any downside to institutions entering the market because this will also increase liquidity in the market and help it mature, so even if they dump bitcoins, it won't shake the market like before.

[aoluain]

We know that bitcoin is a hedge against inflation due to its fixed supply which determines its value to never diminish over time since its supply will continue to decrease as demand keeps increasing. But in recent time, this may not be the only reason why bitcoin is deflationary. According to Adam Livingston, miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day. The half a million bitcoins that Strategy owns will be held with no intent of selling any time soon. This almost guarantees around a -2% annual deflation rate.

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

Why are some people so hung up about MS and the fact that they can choose at
any time to sell their Bitcoin? So many people welcome the fact that they are buying
so much on a regular basis.

This has nothing to do with Bitcoin being deflationary. The amount of Bitcoin
being bought and sold on an hourly basis fluctuates depending on market sentiment.

If you define deflation by people's acquisition of bitcoin like MS then you're absolutely nothing close to understanding bitcoin deflation as no institution or whale holding determines how much scarce bitcoin is, imaging 6 years ago bitcoin was deflationary asset, when micro strategy hasn't acquired any bitcoin. Yet bitcoin was doing absolutely well.

Bitcoin is not deflationary, in 2009, 6 years ago like your example or now and in future years till 2140. We also can not say many bitcoins lost and some reports say it is about 3 or 4 million bitcoins, but those lost bitcoins don't make Bitcoin deflationary.

We don't say fiat currencies are deflationary because people lost their fiat currency by any reason, so we can not say it with Bitcoin because there are lost bitcoins.

Bitcoin is better than fiat currencies because Bitcoin has a cap for its total supply while fiat currencies don't have any cap and this makes Bitcoin very attractive with people who want to find an asset that can help them to save their money against fiat currency inflation.

Erm . . . 2 things:

1. we know as you state yourself, Bitcoin supply is capped at 21,000,000

2. we know that there is a mechanism in place to half Bitcoins mining reward
every 4 years, thats guaranteed.

So when we say FIAT is inflationary we base this on the fact the governments can
and do pring any amount of currency which essentially increases supply and there
is no cap. . . so Bitcoin IS deflationary.

Also it is inevitable that a certain amount of Satoshis and Bitcoin will be lost
forever either through transaction errors, wallet issues or wallets containing
dust amounts for example.

[nemesis_incarnate]

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

This is false.

As a publicly traded company Microstrategy can't just decide to sell all their bitcoin anytime it wants,
anymore than Amazon or Google can one day decide to sell all their company shares.
That's not how it works. The bitcoin belongs to the shareholders and its the shareholders each who decide
when or if to sell their own individual stake, or shares in the company.

They can do so only little by little, I agree on the fact that, MS won't fall off onto the market with all of their BTC in question

[suzanne5223]

Having said that, we have already seen a lot of investment organizations following the footsteps of MicroStrategy, which makes a lot of Bitcoin enthusiasts happy because soon BTC will have the privilege to become a mainstream payment method.

Nevertheless, we shouldn't overlook the disadvantages involved, which could only be the organization dumping its holdings just to make a profit.

Organizations like Strategy invest in bitcoin and many others are also preparing to invest in bitcoin, which means they have accepted using bitcoin as an asset, a commodity to make profits. Meanwhile, bitcoin investors are excited about this because people expect it to push the price of bitcoin higher, not because they expect bitcoin to have a chance to become a payment method. Retail investors are just like institutions, what they care about is the profit from bitcoin.

On the contrary, I don't see any downside to institutions entering the market because this will also increase liquidity in the market and help it mature, so even if they dump bitcoins, it won't shake the market like before.

Bitcoiners who understand the concept and consensus of Bitcoin will understand that with or without the organization, the Bitcoin price will push higher. Technically, the investors who are happy about Bitcoin's acknowledgement and investment by organizations are not only about the market price but the assurance that Bitcoin will gain worldwide.
Is not that I am not happy that institutions and others are entering the market, but we need to be more careful than ever for their surprise party in the market.

Nevertheless, we shouldn't overlook the disadvantages involved, which could only be the organization dumping its holdings just to make a profit.

That's not a disadvantage, it is part of the process.

Nah. It's the disadvantage to the advantage presented by institutional and organization investors entering the market, which is why a lot of Bitcoiners advise holders not to accumulate BTC through institutional investors, because the model of practice is somehow different from the culture of Bitcoin decentralization.

[hero_the_bossman]

Nah. It's the disadvantage to the advantage presented by institutional and organization investors entering the market, which is why a lot of Bitcoiners advise holders not to accumulate BTC through institutional investors, because the model of practice is somehow different from the culture of Bitcoin decentralization.

Surely, every bitcoiner would love to see their BTCs to belong to them, not having custody of the coins in question is no real BTC in your wallet at all.

[dumpsterhawk]

Nah. It's the disadvantage to the advantage presented by institutional and organization investors entering the market, which is why a lot of Bitcoiners advise holders not to accumulate BTC through institutional investors, because the model of practice is somehow different from the culture of Bitcoin decentralization.

Surely, every bitcoiner would love to see their BTCs to belong to them, not having custody of the coins in question is no real BTC in your wallet at all.

You need a certain level of competency to be able to hold BTC and even more to be able to hold it safely. People need to accept that this is how the world is, and without these options a lot of people would not have BTC at all.

We know that bitcoin is a hedge against inflation due to its fixed supply which determines its value to never diminish over time since its supply will continue to decrease as demand keeps increasing. But in recent time, this may not be the only reason why bitcoin is deflationary. According to Adam Livingston, miners currently produce around 450 BTC per day or approximately 13,500 BTC per month, but Strategy acquired 379,800 BTC in the last six months. This translates to the firm purchasing roughly 2,087 BTC per day. The half a million bitcoins that Strategy owns will be held with no intent of selling any time soon. This almost guarantees around a -2% annual deflation rate.

Of course, there is still a risk because institutions like microstrategy can always decide to sell their bitcoins any time soon but as of now and if assuming that they don't, bitcoin's deflationary nature should not be questioned. With more and more governments being more open to crypto, we might see more institutions buying bitcoin and doing the same thing as microstrategy which is hodling.

Why are some people so hung up about MS and the fact that they can choose at
any time to sell their Bitcoin? So many people welcome the fact that they are buying
so much on a regular basis.

They can't find a real disadvantage to it, so they are coming up with this.