Blockchain
Halving
A programmed event that cuts the block reward for miners in half. Bitcoin halving occurs every 210,000 blocks (~4 years), reducing new supply and historically preceding price increases.
Last updated: January 5, 2025
What is Halving?
Halving is a pre-programmed event in Bitcoin (and some other cryptocurrencies) where the mining reward is cut in half. This reduces the rate of new coin creation, making the asset increasingly scarce.
Bitcoin Halving Schedule
How It Works
- Halving every 210,000 blocks
- Approximately every 4 years
- Reduces block reward by 50%
- Continues until ~2140
Reward History
| Halving | Year | Block Reward |
|---|---|---|
| Start | 2009 | 50 BTC |
| 1st | 2012 | 25 BTC |
| 2nd | 2016 | 12.5 BTC |
| 3rd | 2020 | 6.25 BTC |
| 4th | 2024 | 3.125 BTC |
Future Halvings
- 5th: ~2028 (1.5625 BTC)
- 6th: ~2032 (0.78125 BTC)
- Final coin: ~2140
Why Halving Matters
Supply Impact
- Fewer new coins created
- Inflation rate drops
- Stock-to-flow increases
- Scarcity increases
Current Inflation
- After 2024 halving: ~0.85% annual
- Lower than gold
- Trending toward zero
Historical Price Impact
Price Before/After Halvings
| Halving | Price At | 1 Year Later | Change |
|---|---|---|---|
| 2012 | $12 | $1,000+ | +8,000% |
| 2016 | $650 | $2,500 | +285% |
| 2020 | $8,600 | $55,000 | +540% |
| 2024 | $64,000 | TBD | - |
Pattern (Not Guaranteed)
- Halving reduces supply
- Demand stays same or increases
- Price tends to rise
- Eventually peaks and corrects
Mining Economics
Impact on Miners
Before halving:
- Revenue: 6.25 BTC/block
- At $70,000: $437,500/block
After halving:
- Revenue: 3.125 BTC/block
- At $70,000: $218,750/block
Miner Adaptation
- Less efficient miners shut down
- Only profitable miners survive
- Hash rate may temporarily drop
- Difficulty adjusts downward
- Equilibrium restored
Bitcoin’s Fixed Supply
The Math
- 21 million maximum
- ~19.7 million mined (as of 2024)
- ~1.3 million remaining
- Never more than 21 million
Comparison
Traditional Currency: Print unlimited
Gold: ~2% annual new supply
Bitcoin: 0.85% → 0% by 2140The “Halving Cycle”
Typical Pattern
- Year 1-2: Recovery from previous bear
- Halving: Supply shock occurs
- Year 3: Bull market peaks
- Year 4: Bear market correction
- Repeat
Caveats
- Past doesn’t guarantee future
- Market maturing, cycles may change
- External factors matter
- Not investment advice
Trading Around Halving
Common Strategies
- Buy before halving
- Hold through event
- Sell after bull run
Risks
- “Priced in” argument
- Different each cycle
- Can still lose money
- Timing difficult
Buy Bitcoin
Available on all major exchanges:
Other Cryptocurrencies with Halving
| Coin | Halving Interval |
|---|---|
| Litecoin | Every 4 years |
| Bitcoin Cash | Every 4 years |
| Zcash | Every 4 years |
Common Misconceptions
”Price Will 10x Overnight”
- Halving is known in advance
- Partially priced in
- Effects play out over months
”Miners Will All Quit”
- Less efficient quit
- Profitable stay
- Difficulty adjusts
- Network continues
”This Time Is Different”
- Every cycle has unique factors
- Core supply/demand dynamic same
- But circumstances vary
Long-Term Perspective
Final Halvings
As block reward approaches zero:
- Transaction fees become primary
- Miners paid by users
- Security maintained differently
- Transition over decades
Bitcoin’s Design
Halving is fundamental to Bitcoin:
- Predictable monetary policy
- No surprise inflation
- Trustless scarcity
- Digital gold narrative
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