While Bitcoin’s supply is about to see a 50% drop, the U.S. Federal Reserve is entering into more aggressive money printing in a bid to support the economy during the ongoing coronavirus pandemic.

Inflation Drops for BTC as Fed Printing Machines Chug on

As pointed out by @mishalederman on Twitter, in less than 1,000 blocks, Bitcoin’s daily supply will reduce by 50% from 1,800 BTC to 900 BTC. Known as the Bitcoin halving, it represents an inflation control mechanism baked into the core network protocol.

Every 210,000 blocks — a milestone that happens roughly every four years — the mining block reward decreases by 50%. The upcoming event will see mining rewards fall from 12.5 BTC to 6.25 BTC.

This quadrennial 50% block reward subsidy decrease helps to slow down the creation of new ‘coins.’ Without any inflation control, miners with powerful hardware could, in theory, acquire all the block rewards in a short space of time, flooding the market with BTC and causing supply to far outstrip demand. Flooding the market with Bitcoin would likely cause the BTC spot price to crash.

Coincidentally, the May 2020 Bitcoin halving is happening at a time when the global economy is in turmoil due to the shutdowns caused by COVID-19. Again, Satoshi Nakamoto’s (the pseudonymous Bitcoin creator) protocol appears to be charting a course different from that of mainstream finance.

Indeed, Nakamoto famously embedded a headline from The Times — “Chancellor on brink of second bailout for banks” — in the pseudocode for the Bitcoin genesis block. This artifact is in many ways indicative of Nakamoto’s criticism of the mainstream financial apparatus.

While Bitcoin continues to maintain its status as hard money, the Fed is continuing on its printing spree. As previously reported by BeInCrypto, the money-printing is not even backed by paper bills.

The U.S. national debt is approaching the $25 trillion mark with the Treasury Department announcing plans for an additional borrowing worth $3 trillion. The new debt issuance will reportedly take place in Q2 2020.

Rising Interest in Bitcoin Halving

With the Bitcoin halving less than a week away, anticipation for the event continues to grow. Metrics like Google search results show that interest at an all-time high, with the volume of searches four times as high as the figures recorded before the previous halving in 2016.

On-chain activity is also seeing spikes with the network hash rate reaching a new all-time high. Bitcoin proponents will be hoping that the supply shock following the block reward halving triggers another massive upward price growth for BTC.

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