Bitcoin's inflation peaked in 2022 – how does it compare to gold now

When inflation reached historic highs in 2022, Bitcoin and gold deserved special attention. Both as alleged “natural hedges” against inflation. New data from analyst 0xTodd now show an interesting reversal: Bitcoin’s inflation rate has now fallen below zero for the first time and is slowly approaching levels that gold once had. This highlights a key difference in their long-term monetary structures.

How Bitcoin’s inflation has changed from 2022 to today

Four years ago, in 2022, discussions were ongoing about Bitcoin’s ability to withstand inflation. Today, the situation is different. After the April 2024 halving, Bitcoin’s daily production decreased to 450 BTC, which amounts to roughly 16,000 BTC annually. At the current price of around $67,000 per coin, this represents an issuance value of about $15 billion. In contrast, Bitcoin’s average annual inflation now hovers around 0.8%—exactly half of what the gold supply produces. This is no coincidence; it results from Bitcoin’s structural design. Unlike gold, whose supply constantly expands, Bitcoin has a fixed issuance schedule that slows with each halving.

Why gold continues to create more new money

Global gold production amounts to about 3,600 tons annually—roughly one-third of Bitcoin’s current market capitalization, which now reaches $1.34 trillion. In half a year, as much gold is mined as exists in the entire Bitcoin market today. Estimated above-ground gold reserves are around 220,000 tons, with an annual inflation rate of approximately 1.6%. Gold will thus increase at twice Bitcoin’s rate this year—even despite its initial advantage in inflation resistance, which was even stricter in 2022.

Halving 2024: The inflation turning point in Bitcoin

The halving in April 2024 marks a critical inflection point in Bitcoin’s inflation dynamics. Recall that in its early days, Bitcoin was inflationary—but still less so than typical fiat currencies. After Bitcoin grew and its inflation characteristics were less believed in 2022, the dynamics remained unchanged. But now, the situation is shifting. With issuance dropping to 0.8% annually, Bitcoin is approaching the defining hallmark of digital gold—an asset that grows more slowly than physical gold. With another halving in 2028, Bitcoin’s inflation will decrease even further, widening the gap between the two assets.

Central banks still accumulating gold—so far

Despite this revolutionary difference in inflation profiles, central banks are not reducing their gold reserves. From 2022 to 2024, countries like Poland, Turkey, China, and Singapore, as well as Middle Eastern states, significantly increased their gold holdings. The reasons are clear: gold has deep liquidity that Bitcoin still lacks. Estimated gold market capitalization exceeds $14 trillion—many times more than Bitcoin. Gold also remains a geopolitically neutral asset, which remains crucial for sovereign states. As analyst noted: “Bitcoin is still too young and too small for sovereign budgets.” Since Bitcoin’s inflation is now lower than gold’s, time works in its favor—but not yet for states.

Companies see an opportunity that governments ignore

While governments remain conservative, tech companies and large corporations are adopting Bitcoin more rapidly. More public firms now hold Bitcoin on their balance sheets, effectively setting a new standard for corporate finance. This contrasts with the stance of central banks and indicates a divide: while Bitcoin’s inflation in 2022 seemed too high for national treasuries, today Bitcoin is becoming a natural asset for those concerned about eroding monetary value—namely corporations and long-term investors. As the theory states, each generation of assets chooses its reserve standard. The golden era of central banks and state treasuries lasted centuries. Bitcoin is gradually building its era—among corporations and digital entities.

Conclusion: Bitcoin’s inflation and the future of monetary competition

2022 marked Bitcoin’s inflation peak in public consciousness—when it still seemed risky due to its continually increasing supply. Now, just four years later, the tables have turned. Bitcoin’s inflation has reached a point measured in tenths of a percent and is slightly decreasing with each cycle. While gold remains the preferred asset for governments, Bitcoin is becoming the currency of choice for those seeking protection from state inflation. The future isn’t about which should prevail—it’s about how both will participate in creating a new financial system where inflation is no longer an unavoidable fate but a choice between assets.