Everything crypto investors and enthusiasts need to know about this event.

Every four years, the Bitcoin network experiences an event known as the “Halving.” The fourth Bitcoin halving is set to happen on 20 April 2024.

Bitcoin halving is a pre-programmed event embedded in its protocol and occurs after the mining of every 210,000 blocks. During a halving, the reward for mining a new block of Bitcoin is cut in half. Bitcoin miners that successfully validate transactions are currently awarded 6.25 new Bitcoin for each mined block. This date is based on current estimates that change with every new block. The halving will reduce the block reward to 3.125 BTC (each Bitcoin has 100,000,000 satoshis in it.).

The halving of the block reward is a key feature of Bitcoin’s monetary policy, implemented to control the inflation rate, ensure the cryptocurrency’s scarcity, and increase its value over time.

Each Bitcoin halving event reduces the number of new Bitcoins produced per block, resulting in a lower supply. As it becomes scarcer and demand increases, the price likely increases in line with supply and demand economics.

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This fixed supply is one of the fundamental characteristics differentiating Bitcoin, which was created as a deflationary currency similar to gold, from traditional fiat currencies, which can face inflationary pressures due to central bank policies.

These scarcity-driven price dynamics have historically played a role in Bitcoin’s price appreciation after each halving event, though it is difficult to predict the future price or reward trends. The price is normally influenced by a multitude of various factors and isn’t solely determined by halving events including market sentiment, overall demand for Bitcoin, investor speculation, and external events.

The Bitcoin price was $70,667 as of 12 April 2024. 

Past halving history

Bitcoin halving has happened three times until now.

The 1st Bitcoin halving date was 28 November 2012, with the reward falling from 50 BTC down to 25 BTC. The 2nd event took place on 9 July 2016 and the reward dropped to 12.5 BTC. The 3rd was on 11 May 2020 (reward: 6.25 BTC).

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As many as 3,600 Bitcoins are mined daily. The total supply so far has passed by 19 million Bitcoins. Based on the current Bitcoin halving cycle and schedule, 100% of all Bitcoin will be mined sometime around the year 2140. When the last one will be mined, the supply will be capped at 21 million.

There are more than 1 million individual Bitcoin miners and thousands of mining farms, large and small. Most of them (22%) are located in the United States.

The number of Bitcoin traders stands at 210 million. The total market capitalization of Bitcoin is $602 billion.

Sources: Henley Global (Crypto Wealth Report), SwanBitcoin

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