Don’t think Bitcoin’s supply is finite? You probably don’t understand the tech
Bitcoin’s (BTC) price rise has brought all sorts of comments out of the woodwork. Although many carry a bullish tint, some folks still doubt crypto as a new store of value class. David Rosenberg, the chief economist and strategist, as well as president, of the firm Rosenberg Research & Associates, recently described gold’s supply as more predictable than Bitcoin’s.
“Everybody seems to believe that we’re going to get to that 21 million cap on the supply constraint, but there’s really nothing in the protocol to suggest that the supply of Bitcoin can’t go up once we hit that limit,” Rosenberg said in a Bloomberg interview on Thursday.
Bitcoin’s set 21 million supply serves as one of its biggest selling points as a store of value. The asset also has a consistent flow of BTC entering into circulation that continue until that supply reaches 21 million. Bitcoin’s pseudonymous creator, Satoshi Nakamoto, wrote these parameters into Bitcoin’s code.
Gold, on the other hand, depends on a number of factors. Its ultimate supply remains fairly uncertain, especially considering technological advancements that might lead to cheaper gold mining or further discovery.
“The one thing we do know about gold, is we know the supply curve of gold with certainty,” Rosenberg claimed. “We don’t know the future supply curve of Bitcoin,” he added. “People think they know, but they don’t really know.”
The economist also called BTC “a massive bubble,” saying that folks do not understand the asset’s supply or its creator. “It’s the classic follow the herd, extremely crowded trade,” he expressed.
Meanwhile, other mainstream financial giants seem to have a better understanding of the asset and its scarcity effect, stockpiling sums of Bitcoin as part of an institutional buying trend.