Halving

What Is Halving?

Halving refers to a process that reduces the rate at which new cryptocurrencies with scheduled issuances are created. More specifically, it reduces the reward miners get for validating blockchain transactions. Halving events ensure that a crypto asset can follow a steady issuance rate until it eventually reaches its maximum supply.

The most recent halving occurred in April 2024 at block 840,000, reducing the reward from 6.25 BTC to 3.125 BTC. The next halving is projected to take place around April 2028 at block 1,050,000, which would reduce the reward to 1.5625 BTC.

Why Does Bitcoin Halving Occur?

The scheduled reduction will continue until approximately 2140, when the last bitcoin is expected to be mined and no further block rewards will be issued.

Halving events do not directly change the number of bitcoins you hold. However, they can indirectly affect the price of Bitcoin and broader market conditions, which is why investors, traders, and analysts pay close attention to these events.

How Does Bitcoin Halving Work?

The first halving happened in 2012, cutting the block reward from 50 BTC to 25 BTC. Subsequent halvings in 2016 and 2020 further decreased the reward to 12.5 and 6.25 bitcoins respectively. The fourth halving in April 2024 reduced the reward to 3.125 BTC. After each halving, the daily issuance of new bitcoins also drops by half, which means the rate at which new supply enters the market slows down significantly.

Once 33 halvings have occurred, the halving process will stop, and no more new bitcoins will be created. At that point, the maximum supply of 21 million BTC will have been reached. 

To date, over 95% of the total bitcoin supply has been mined. The remaining supply is expected to be issued over the next century through progressively smaller block rewards.