EMC Labs: BTC's 4th halving accounts for 30% of the effective supply, triggering a significant deflationary effect

Cryptocurrency research institution EMC Labs stated today that although the absolute quantity of Bitcoin's fourth halving is not as much as previous ones, it may actually account for more than 30% of the effective circulation and trigger a significant deflationary effect in the next four-year cycle.

According to EMC Labs' calculations, on April 20th, the absolute quantity of BTC's fourth halving was 164,000 per year, compared to 328,000 per year from the halving four years ago. However, because centralized exchanges that determine BTC's short-term pricing power have reduced their number of BTCs from 3.06 million in the last cycle to 2.29 million this time around. This results in an annual reduction accounting for only 7% of short-term liquidity compared with a proportionate decrease from last period’s rate at10%. The total reduction over four years accounts for up to 28% of short-term liquidity; considering that centralized exchanges will continue to reduce their holdings further pushing this figure above potentially above30%. Additionally due to long term holders increasing by14% since four years ago these two factors combined are causing a noticeable supply deflation impact after this halving.

EMC Labs states that this halving has reduced BTC's annual inflation rate down to0.8%, they believe within18 months post-halving we can expect another super bull market following past trends.