Bitcoin's value is flat year-to-date, facing volatility after hitting an all-time high of $109,000 in January 2025. Factors like Trump's trade war and a recent halving affecting block rewards are influencing its price now around $106,000. The halving lowered Bitcoin's inflation to 0.83%, raising questions about its long-term fundamentals. Amidst escalating government spending and budget deficits, Bitcoin's inherent scarcity makes it an attractive alternative for wealth protection, while market sentiment remains uncertain about surpassing past highs.
Bitcoin's fundamentals can be summed up in simple terms: government spending ignites steep budget deficits, totaling almost $2 trillion in 2024, prompting people to seek wealth safeguards.
The fourth Bitcoin halving last April slashed miner block rewards from 6.25 BTC to 3.125 BTC, lowering Bitcoin's inflation rate to 0.83%, significantly below Fed's target.
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