Bitcoin’s circulating supply has reached 95% of its 21 million hard cap, leaving just 2.05 million to be mined. This milestone signifies Bitcoin’s resistance against debasement and intervention. The supply milestone is unlikely to immediately impact prices, but validates Bitcoin’s digital gold narrative. Institutional players are locking up the limited supply for long-term holding.

Bitcoin’s annualized inflation rate is expected to decline as its supply diminishes. Limiting new supply is speculated to increase each coin’s value as demand rises. However, the remaining 5% will take over 100 years to circulate fully. The milestone emphasizes Bitcoin’s scarcity and highlights its supply schedule designed to be predictable and scarce.

The 95% milestone indicates Bitcoin’s maturity and transition towards predictable, long-term scarcity. While miners may not see an immediate price spike, the dwindling supply will increase pressure, especially after the April 2024 halving. Miners will need to adapt to rely more on transaction fees for profitability as supply growth slows.

As the supply growth slows, miners will shift from being block reward-dependent to transaction-fee-dependent. This shift will create pressure for miners to consolidate or seek efficiency gains. The milestone represents a fundamental shift in the economics of mining as the network hash rate adjusts to the changing dynamics of Bitcoin’s supply.

Read more at Cointelegraph: Bitcoin Surpasses 95% Max Supply 16 Years After Genesis