Bitcoin halving is a pre-programmed event occurring approximately every four years that reduces the block reward for mining new Bitcoin (BTC) by 50%. This mechanism is a cornerstone of Bitcoin's economic model and has historically influenced the broader cryptocurrency market.
The Bitcoin protocol, originally coded by Satoshi Nakamoto, governs the issuance of new BTC. New coins are exclusively created through mining rewards, which halve every 210,000 blocks (roughly every four years). After 64 halvings, no new BTC will be minted, capping the total supply at 21 million coins. Below is an overview of past and projected halvings:
| Halving Event | Block Height | Date | New Block Reward (BTC) |
|---|---|---|---|
| 1 | 210,000 | November 28, 2012 | 25 |
| 2 | 420,000 | July 9, 2016 | 12.5 |
| 3 | 630,000 | May 11, 2020 | 6.25 |
| 4 | 840,000 | April 2024 (est.) | 3.125 |
| 5 | 1,050,000 | 2028 (est.) | 1.5625 |
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What Happens When All BTC Is Mined?
By 2140, after the 64th halving, miners will rely solely on transaction fees for revenue. While this shift raises questions about network security, sustained demand could incentivize higher fees, ensuring profitability and continued miner participation.
Why Does Bitcoin Halve?
- Controlled Supply: Halving enforces Bitcoin’s deflationary nature, slowing issuance to mimic "digital gold."
- Anti-Inflation: Prevents central-bank-style monetary manipulation, aligning with Satoshi’s vision of decentralized finance.
Historical Price Impact of Halvings
While causation isn’t proven, halvings correlate with bull cycles:
| Halving Cycle | BTC Price at Halving | Peak Price | Date of Peak | % Increase |
|---|---|---|---|---|
| 2012–2016 | $12.40 | $1,127 | November 2013 | 8,988% |
| 2016–2020 | $653 | $19,665 | December 2017 | 2,911% |
| 2020–2024 | $8,752 | $69,044 | November 2021 | 689% |
Key Insight: Each cycle’s percentage gains have diminished, but absolute price highs increased.
Why Don’t All Cryptocurrencies Halve?
- Varied Tokenomics: Projects like Ethereum use fee burns or dynamic issuance (e.g., EIP-1559).
- Forks & Alternatives: Litecoin halves; Bitcoin Cash follows Bitcoin’s model.
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Celebrating Halvings
Communities host "halving parties" with countdowns. Search #HalvingParty on social media to join events.
Key Takeaways
- Halving occurs every ~4 years, slashing new supply.
- Deflationary by design; contrasts fiat inflation.
- Historically precedes bull markets, but past performance ≠future results.
FAQ
Q: When is the next Bitcoin halving?
A: Expected April 2024 at block height 840,000.
Q: How does halving affect miners?
A: Short-term revenue drops; long-term viability depends on transaction fees.
Q: Will BTC price always rise post-halving?
A: Not guaranteed—market cycles depend on broader adoption and macroeconomic factors.