Bitcoin scarcity refers to the predetermined and finite supply cap of 21 million BTC. This characteristic is a core design principle intended to create a deflationary asset, contrasting with fiat currencies that can be issued indefinitely. The programmed scarcity is a fundamental driver of its perceived value proposition as a digital store of value.
Context
Bitcoin scarcity is a recurring theme in news reports discussing its potential as “digital gold” or its long-term investment thesis. Analysts frequently reference the diminishing rate of new Bitcoin creation through mining, known as halving events, as a factor influencing market cycles and investor demand. Understanding this attribute is crucial for assessing Bitcoin’s economic model and its place in global finance.
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