Bitcoin Halving - Everything you need to know

Quick Summary

The Bitcoin halving is a programmed event occurring approximately every four years (or every 210,000 blocks) that cuts the block reward miners receive in half. This mechanism reduces the rate of new Bitcoin entering circulation, reinforcing Bitcoin's 21 million supply cap and deflationary design. If you’re interested in buying and selling Bitcoin (BTC), you can do so at iTrustCapital.

Key Facts at a Glance

Total Bitcoin supply: 21 million
Halving frequency: Approximately every 4 years (every 210,000 blocks)
Current block reward: 3.125 BTC (as of May 2026)
Next halving date: Approximately 2028
Daily Bitcoin mined post-2024 halving: ~450 BTC
Projected final mining date: 2140
Bitcoin mined to date: Approximately 19.8 million of 21 million total

Interested in understanding the key elements that influence the supply, demand, and price of Bitcoin? One event that stands out is the "Halving". This scheduled occurrence plays an important role in regulating the availability of new bitcoin in the market because of its limited supply. Seasoned Bitcoin investors express excitement about halving events due to historical market patterns observed following previous halvings. In this article, we'll break down the Bitcoin Halving, its history, and its effect on Bitcoin's price. Let's get to it!

What's the Halving?

Every four years, the Bitcoin network undergoes an event called the "Halving", which cuts the supply of newly created bitcoins entering the market. The creator of Bitcoin, Satoshi Nakamoto, implemented a scarcity mechanism into the Bitcoin protocol, which limits the total supply of bitcoin to ever be created to 21 million.

The Halving History

When the Bitcoin network was created in 2009, the amount of bitcoin mined per day was 7,200. However, the halving cuts this number in half roughly every four years. The first halving occurred in November 2012, reducing the daily creation to 3,600, then again in July 2016 to 1,800, then in May 2020 to 900, and most recently in April 2024 to 450. As of April 2024, approximately 450 BTC are mined daily, down from 900 BTC before the halving. This cycle will continue until all 21 million bitcoins are mined, projected to happen around the year 2140.

Why is the Halving Important?

The halving is especially important because it controls the supply of new Bitcoin entering circulation. The halving contributes to the following:

Scarcity and Demand

Reduced supply increases rarity and can drive demand higher. The halving reduces the number of new bitcoin being created, making new bitcoin more rare. This limited supply can increase demand, which in turn may push Bitcoin's price higher.

Deflationary Mechanics

Bitcoin is designed to become increasingly scarce over time, similar to gold. The halving is engineered to position Bitcoin as a deflationary asset, which could enhance its long-term value by making it increasingly scarce.

Bitcoin Halving History

Halving	Date	Block Height	Block Reward Before	Block Reward After	Price at Halving	Peak Price After
1st	November 2012	210,000	50 BTC	25 BTC	~$12	~$1,100
2nd	July 2016	420,000	25 BTC	12.5 BTC	~$650	~$18,000
3rd	May 2020	630,000	12.5 BTC	6.25 BTC	~$8,500	~$69,000
4th	April 2024	840,000	6.25 BTC	3.125 BTC	~$64,000	TBD

Past Bitcoin Halvings

Bitcoin's history shows a pattern that many find exciting. A noticeable price increase typically follows the halving events. Since its inception, Bitcoin has undergone four halvings, and each one has been followed by a period of increased valuation.

Take a look below to see the price of Bitcoin during and after the past halving events.

The First Halving - November 2012

Price of Bitcoin During the Halving: ~$12
Price of Bitcoin After the Halving: ~$1,100

The Second Halving - July 2016

Price of Bitcoin During the Halving: ~$650
Price of Bitcoin After the Halving: ~$18,000

The Third Halving - May 2020

Price of Bitcoin During the Halving: ~$8,500
Price of Bitcoin After the Halving: ~$69,000

The Fourth Halving - April 2024

Price of Bitcoin During the Halving: ~$64,000
Price of Bitcoin After the Halving: ~$65,000

Now with a solid understanding of the Bitcoin Halving, let's dive into the role of Bitcoin miners.

What's a Bitcoin Miner?

A Bitcoin Miner is a person or organization that uses computer power to help verify transactions on a specific type of digital record-keeping system known as a Proof of Work (PoW) blockchain. The primary job of the Miner is to keep the system secure and trustworthy. For the work completed, the Miner will receive two types of rewards in bitcoin.

Miner Rewards

Block Reward: A set number of newly minted bitcoins that are rewarded to the Miner for successfully adding a new block of transactions to the blockchain. As of April 2024, the block reward is 3.125 BTC per block.

Transaction Fees: Small amounts of bitcoin collected from users who want to prioritize their transactions for quicker validation and inclusion in a block.

Miners are crucial to the Bitcoin network's operation, ensuring its continued functionality and managing the daily issuance of new bitcoins, controlling the rate at which they are created.

A Historical Perspective

The Bitcoin halving is an event that excites many enthusiasts, who look forward to its occurrence. Investors are particularly eager for the next halvings, as it continues to reduce the supply of new bitcoin being created, thus potentially increasing demand and its price.

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Frequently Asked Questions

When is the next Bitcoin halving?

The next Bitcoin halving is expected to occur in approximately 2028. Bitcoin halvings happen every 210,000 blocks, which translates to roughly every four years based on the average block time of 10 minutes.

Why does Bitcoin halving affect price?

Bitcoin halving affects price through basic supply and demand economics. When the halving reduces the rate of new Bitcoin creation, the supply of new coins entering the market decreases. If demand remains constant or increases while supply decreases, this scarcity can drive prices higher.

How many Bitcoin halvings are left?

There are approximately 28 Bitcoin halvings remaining. With four halvings completed (2012, 2016, 2020, and 2024), and halvings continuing until around 2140 when all 21 million Bitcoin will be mined, roughly 28 more halving events will occur.

What happens when all Bitcoin is mined?

When all 21 million Bitcoin are mined (projected around 2140), miners will no longer receive block rewards. Instead, their compensation will come entirely from transaction fees paid by users who want their transactions validated and included in blocks.

How does the halving impact Bitcoin miners?

The halving cuts miners' block rewards in half, reducing their primary source of income. Miners must either operate more efficiently, hope for Bitcoin price increases to offset reduced rewards, or rely more heavily on transaction fees to remain profitable.

What was the block reward before the 2024 halving?

Before the April 2024 halving, the block reward was 6.25 BTC per block. After the halving, it was reduced to 3.125 BTC per block, cutting the daily Bitcoin creation from approximately 900 BTC to 450 BTC.

Is Bitcoin halving good for investors?

Historically, Bitcoin halvings have been followed by significant price increases within 12-18 months. However, past performance does not guarantee future results, and many factors beyond the halving influence Bitcoin's price. Investors should conduct their own research and consider their risk tolerance.

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