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What is Bitcoin halving?

Bitcoin halving is an event where the supply of new bitcoins is reduced by 50 percent. The first Bitcoin halving took place on November 11, 2012. Bitcoin halving is a pre-programmed event in the Bitcoin protocol strongly linked to Bitcoin mining. Other Proof of Work cryptos have halvings as well.

The Bitcoin halving event has significant economic effects that extend beyond technical aspects. The group that is most directly impacted by the Bitcoin halving is the miners. The Bitcoin halving 2024 takes place in April 2024, when the blockchain reaches the block number 840,000.

What is Bitcoin halving?

Bitcoin halving is an event where the supply of new bitcoins is reduced by 50 percent. Bitcoin halvings occur roughly every four years and are designed to ensure that the total supply of Bitcoin never exceeds 21 million. The next Bitcoin halving takes place in April 2024.

Bitcoin halving refers to the reduction of the block rewards. These are bitcoins that miners receive for adding new blocks to the Bitcoin blockchain. When Bitcoin was first introduced, miners received 50 Bitcoins for every block they added. This reward has been halved after every 210,000 blocks.

The current block reward is 6.25 bitcoins. It will be halved to 3.125 BTC per block in the Bitcoin halving 2024. This will be the fourth halving event in Bitcoin’s history. There will be 32 halvings until the supply reaches 21 million bitcoins. This will take place in the year 2140.

The chart below shows the development of Bitcoin inflation in the coming decades. Bitcoin’s inflation comes from the block rewards, through which new bitcoins are issued.

bitcoin inflation

The fixed supply of Bitcoin sets it apart from traditional fiat currencies, such as the US dollar, euro, or the Japanese yen. While the central banks can print fiat currencies in unlimited quantities, Bitcoin has a predetermined supply of 21 million coins. This scarcity is built into its code and enforced through the halving events.

It is important to note that halvings make Bitcoin disinflationary, not deflationary. This means the inflation of Bitcoin gets smaller over time, but it never goes below zero. Therefore, the amount of Bitcoin in circulation will never decrease. Bitcoin is often considered a deflationary cryptocurrency, which is not entirely true. The correct term is disinflationary.

Previous Bitcoin Halving Dates

The first Bitcoin halving took place in November 2012. The first Bitcoin halving changed the Bitcoin block rewards from 50 BTC per block to 25 BTC per block. The halving had a major impact on block rewards on Bitcoin terms, but a small one in dollar terms because the price of Bitcoin was only around $11 at the time.

There have been three Bitcoin halvings in the history of Bitcoin: in 2012, 2016, and 2020. Here are the previous Bitcoin halving dates and the block reward changes after each halving.

HalvingBlock rewardSupply growth per dayHalving date
Halving 1 50 BTC -> 25 BTC 7200 BTC -> 3600 BTC November 28, 2012
Halving 2 25 BTC -> 12.5 BTC 3600 BTC -> 1800 BTC July 9, 2016
Halving 3 12.5 BTC -> 6.25 BTC 1800 BTC -> 900 BTC May 11, 2020
Halving 4 6.25 BTC -> 3.125 BTC 900 BTC -> 450 BTC April 2024 (estimated)

Each halving happens after 210,000 blocks, which means approximately four years. The time between halvings changes because the Bitcoin block times can vary from a few minutes to more than one hour. The average block time settles to around 10 minutes in the long run.

The hash rate of the Bitcoin network is growing because miners have become more effective, and new miners are plugged into the network. Nevertheless, the block time stays at 10 minutes because the Bitcoin network changes the mining difficulty to match the increased hash rate. The higher the hash rate is, the more difficult the mining becomes.

The difficulty adjustment ensures that the Bitcoin supply grows at a predictable pace.

How Does Bitcoin Halving Work?

Bitcoin halving is a pre-programmed event in the Bitcoin protocol strongly linked to Bitcoin mining. To understand how the Bitcoin halving works, we must explore the concepts of Proof of Work and Bitcoin mining.

Bitcoin is utilizing a consensus algorithm called Proof of Work. A consensus algorithm is the procedure that determines how the network nodes reach consensus. In Bitcoin’s case, consensus means validating the transaction data. Proof of Work is a consensus algorithm that was mostly used before 2016. It has been replaced with Proof of Stake in recent years.

Proof of Work requires that network participants perform provable work for the right to create new blocks. In Bitcoin’s case, these participants are called miners. Miners are specially designed computers (ASICs) optimized for this task. Below is a picture of Bitcoin miners.

bitmain asic

Miners are the backbone of the Bitcoin network. They use computational power to solve mathematical problems, and in doing so, they validate and add new transactions to the blockchain. For every block they add, miners are rewarded with bitcoins.

The block reward serves a dual purpose: it incentivizes miners to invest computational resources in the network and introduces new bitcoins into circulation. All bitcoins have been created through the mining process. When writing this article, about 93 % of all bitcoins have been mined (issued).

Read more about the mining of Bitcoin from this article: The Beginner’s Guide to Bitcoin Mining.

The actual halving event is performed without any human involvement. A function in the Bitcoin program code reacts to the number of blocks and reduces the block reward in half when the time comes. This process is repeated in every halving. The Bitcoin program runs independently day after day, year after year.

Why does the halving happen after 210,000 blocks, and why is the supply set to 21 million bitcoins? There is no definitive answer. These numbers were set by the Bitcoin’s creator, Satoshi Nakamoto. Satoshi has been hiding for over 10 years. It is unlikely he’ll ever resurface to explain these choices.

Do Other Cryptos Have Halvings?

Other Proof of Work cryptos have halvings as well. The most popular ones (besides Bitcoin) are Bitcoin Cash and Litecoin. Bitcoin Cash is a cryptocurrency that forked off Bitcoin in 2017, while Litecoin’s code is based almost entirely on the Bitcoin program code.

Bitcoin Cash has identical supply mechanics to Bitcoin, and its halvings occur almost simultaneously. The Bitcoin Cash halving of 2024 will happen approximately three weeks before Bitcoin’s.

Litecoin also has halvings approximately every four years. Since Litecoin was launched in October 2011, about a year before the Bitcoin halving of 2012, it has halvings a year before Bitcoin. The previous Litecoin halving took place in August 2023.

There are also other Proof of Work cryptocurrencies. Some use halvings, and some might reduce the block rewards through other mechanics. Most cryptocurrencies use a Proof of Stake consensus with no pre-determined halvings.

The Economic Impacts of Bitcoin Halving

The Bitcoin halving has significant economic effects that extend beyond technical aspects. By influencing the rate of new Bitcoin issuance, halving events can shape the broader crypto market and impact investor sentiment.

While it’s essential to note that correlation doesn’t imply causation, Bitcoin’s price has historically shown significant movements after halving events.

  • After the 2012 halving, Bitcoin’s price substantially increased within the following year.
  • The 2016 halving was followed by the monumental bull run of 2017, where Bitcoin reached its then-all-time high.
  • Post the 2020 halving, Bitcoin embarked on another bull run, reaching new price heights in 2021.

While many attribute Bitcoin’s price surges to halving events, others argue that external factors, such as increased institutional interest, technological advancements, and broader market dynamics, play a more significant role.

The pseudonym “PlanB” published the Stock-To-Flow model in 2019, which predicts Bitcoin’s price development based on halving cycles. The graphic below shows the model’s forecast (brown line) and Bitcoin’s price development. The color codes indicate the time to the next halving event.

bitcoin halving s2f

Even if bull runs have happened previously after halvings, it doesn’t mean this would be true in the future. There are a couple of arguments to support this theory.

  1. The market cap of Bitcoin is much larger now, which makes it more difficult for the price to rise.
  2. Bitcoin futures, options, EFTs, etc., didn’t exist at this scale during the previous halvings.
  3. More than 90 % of the supply is already issued, making the future supply changes relatively small.
  4. The price of Bitcoin has reacted massively to central bank actions and stock market moves in recent years.

Much evidence supports the theory that Bitcoin’s price is mostly impacted by global liquidity (money supply changes), the strength of the US dollar, and the stock markets. The popular Stock-To-Flow model has also been debunked and regarded as broken since late 2021.

However, even if the halving wouldn’t directly impact Bitcoin’s price, it can do so indirectly by creating a positive investor sentiment. Halvings are often discussed in media months before they happen. Because bull markets have previously followed halvings, many believe this will happen again. This belief could create a self-executing prophecy.

The Impact of Halving on Miners

The group that is most directly impacted by the Bitcoin halving is the miners. While investors and other industry operators might see changes in their portfolios in the long run, there is no instant impact. Miners, however, will feel the change in the first block after the mining. Let’s explore how the halvings impact the mining industry and process.

Miners are the operators that maintain the Bitcoin blockchain. They also provide security to the network through the hash rate. The growing hash rate makes the Bitcoin network more secure and prevents data manipulation by making it too expensive and practically impossible.

It would pose a possible security threat if many miners go bankrupt and unplug their devices. This is why the debate about miner profitability is very relevant for Bitcoin. And this debate is tightly related to halving events because they cut the block rewards by 50 % each time.

As the block rewards are reduced over time, at least one of the two things must happen to keep miners profitable:

  1. The price of Bitcoin has to rise
  2. Transaction fees have to rise

Note that Bitcoin miners get the block rewards and the transaction fees spent on each block.

In the past, the price of Bitcoin has risen enough to keep most miners profitable. However, the price of Bitcoin rises less and less in each bull run, and this trend is expected to continue as the market cap of Bitcoin increases.

The transaction fees will probably get higher over time. However, if they rise too high, it might reduce the network usage and make the total pie of fees smaller. The block size of Bitcoin is very small (and not being increased), which limits the amount of fees miners can extract.

Bitcoin halvings will always lead to some consolidation in the mining business. Even with reduced block rewards, the most profitable mining farms will be profitable, while many smaller miners have to unplug their devices.

When is Bitcoin halving 2024?

The Bitcoin halving 2024 takes place in April 2024, when the blockchain reaches the block number 840,000. The exact day of the halving can be estimated when there are two to three weeks to the halving. The Bitcoin halving of 2024 will see the block rewards reduced from 6.25 BTC to 3.125 BTC per block.

Undoubtedly, the halving of 2024 will get more media coverage than all other halvings combined. Never before has the awareness of Bitcoin halvings been so great. Analysts, investors, and enthusiasts will likely engage in heated debates and predictions about the potential price impact of the halving. From crypto-specific blogs to major financial news platforms, media outlets will cover the event extensively, highlighting its significance and potential implications for the broader cryptocurrency market.

Historically, Bitcoin’s price has entered a bull market after the halving events.  While past performance does not indicate future results, many crypto community members are optimistic about a post-halving price surge. Even if the price impact of the halving would be minimal, halving likely creates a positive investor sentiment, which could occur simultaneously when the global investment environment becomes positive.

It looks likely that the macro environment will start to become more favorable in 2024. We should see global liquidity grow again, and central banks are probably lowering interest rates. All this could easily coincide with the halving event. Hence, another crypto bull in 2025 wouldn’t certainly be a massive surprise to anyone.

The halving will directly impact miners, as their rewards for validating transactions and securing the network will be reduced. Some miners may find it difficult to maintain their operations, particularly if the value of Bitcoin does not increase enough to compensate for the decrease in block rewards. As a result, the mining industry may become more consolidated, with only the most efficient operations remaining viable.

We will likely see more and more discussion of the security of the Bitcoin network after the halving of 2024.


We are the AboutBitcoin team, a group of experienced crypto specialists with a deep focus on the cryptocurrency market since 2017. Our team delivers weekly fresh insights from the dynamic world of crypto. Join us on an exciting journey of exploration as we navigate the rapidly evolving landscape of cryptocurrencies!

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