Bitcoin’s Future as a Scarcer Asset Than Gold, According to Brian Kelly
Bitcoin has surpassed the critical $43,000 level and even briefly crossed $44,000 multiple times in the last 24 hours. In light of this, Brian Kelly, a Fast Money trader and cryptocurrency investor, shared his insights on the future of Bitcoin as a decentralized finance (DeFi) asset.
Kelly believes that after the Bitcoin halving in spring 2024, the supply of Bitcoin will become more limited. This would make it the first asset in history to be scarcer than gold. He explained this during an episode of Fast Money streamed on December 4. Kelly pointed out that historical trends show Bitcoin’s best performance occurs 12 to 16 months after the halving. However, he noted that this time might be different due to the higher price of Bitcoin and its lower daily output of only about 900 BTC.
“But, what it does do is make Bitcoin more scarce than gold. So, for the first time in history, you have an asset that is more scarce than gold – let’s call it the stock-to-flow ratio. So, the amount of Bitcoin mined every year divided by the amount outstanding – same with gold. And now there’ll be less Bitcoin than gold mined on a relative basis.”
Despite these factors, Kelly remains bullish on Bitcoin and believes that altcoins will follow its breakout. This has already been observed with Ethereum (ETH) and Solana (SOL), while others could experience similar trends by January or so.
Bitcoin Price Analysis
At present, Bitcoin is trading at $43,844 with a 5.35% increase in the last 24 hours. Over the previous seven days, it has gained 14.83%, and on its monthly chart, it has made a more significant advance of 25.58% as of December 6.
All in all, Bitcoin’s role as digital gold is becoming increasingly prominent. The halving mechanism embedded in its code aims to reduce mining rewards and make the asset scarcer, potentially driving up demand and its price.
Hot Take: Bitcoin Becoming Scarcer Than Gold Signals a New Era
The anticipated scarcity of Bitcoin post-halving in spring 2024 could mark a significant milestone in the history of assets. Brian Kelly’s observation that Bitcoin will become scarcer than gold introduces a new era where the world’s leading cryptocurrency takes on an unprecedented level of scarcity. This development has the potential to further solidify Bitcoin’s position as a store of value and increase its allure to investors seeking a hedge against inflation. With altcoins following Bitcoin’s breakout, the crypto market could experience substantial growth in the coming months, opening up new opportunities for traders and investors alike.
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