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What Is Bitcoin Halving? How Does It Affect Bitcoin Price?

What Is Bitcoin Halving? How Does It Affect Bitcoin Price?

About every four years, the amount of new bitcoins created per block is halved. This scarcity measure limits supply and can push the BTC price up.

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What Is Bitcoin Halving?

Bitcoin has many characteristics embedded in its code, which is programmed to allot a total maximum supply of 21 million BTC. Two of Bitcoin’s most important aspects are its fixed supply and decreasing block rewards, which occur about every four years.

This periodic decrease in the rate of bitcoins issued into circulation is called ‘Bitcoin halving’. Back in 2012, the reward was 25 bitcoins per block, and in 2016, it decreased to 12.5 bitcoins per block. As of September 2023, miners are rewarded 6.25 bitcoins per block mined.

Get all the details on the biggest cryptocurrency by market cap in our in-depth article What Is Bitcoin?

How Is Bitcoin Halving Correlated to Bitcoin Mining? 

For every 210,000 blocks, the number of newly issued bitcoins is cut in half. This translates to roughly every four years, depending on how quickly blocks are mined, which averages about every 10 minutes. 

Blocks are added to the Bitcoin blockchain by a process called mining, which typically involves custom-made computers called Application-Specific Integrated Circuits (ASICs) — computers designed to hash compute as quickly as possible.

Mining is used to permanently add transactions to the blockchain without the interference of any centralised entity. Miners are incentivised to secure the network by spending resources (mining), and are subsequently rewarded with bitcoins.

How Many Bitcoin Halvings Have There Been?

There have been three Bitcoin halvings so far: the first one occurred in November 2012, when the block reward was decreased from 50 bitcoins per block to 25 bitcoins per block; the second halving dates back to July 2016, when the reward per block was reduced again, from 25 bitcoins per block to 12.5 per block; the third halving happened in May 2020, when block rewards decreased from 12.5 bitcoins per block to 6.25 bitcoins per block.

Bitcoin Halving Infographic

When Is the Next Bitcoin Halving?

Bitcoin has seen an increasing hashrate since its conception, meaning block times have come to average less than 10 minutes now. As these fluctuate, it is hard to predict the exact date of the next halving.

A future halving is estimated to occur in 2024, where the reward will be reduced from 6.25 to 3.125 bitcoins per block mined; the fifth halving is estimated to occur in 2028, with the reward halved to 1.5625 bitcoins per block mined.

Does Halving Affect Bitcoin’s Price?

BTC price can be affected by the halving as:

  • Rewards are halved, which promotes healthy and sustainable growth of the network. By reducing the rate at which new bitcoins are generated, the halving ensures that Bitcoin’s supply remains limited and finite.
  • The inflation rate of Bitcoin decreases after a halving, meaning the supply of new coins entering the market is reduced.

This topic is often debated amongst market analysts and participants alike. Some believe the halving will cause a significant increase in the price of Bitcoin, as the reduced inflation rate will lead to higher demand and a corresponding increase in value. Others argue that the halving is already priced into the market, and the event will not affect the cryptocurrency’s price.

Research Bitcoin Halving Effect On Price Infographic

Historically, halvings have generally been preceded by bear markets and followed by bull markets.

Ultimately, the price of Bitcoin is determined by a variety of factors. These include market demand and sentiment, plus regulatory developments. It is difficult to predict how the halving will impact its value.

Learn about the Four Phases of the Crypto Market Cycle.

What Does the Bitcoin White Paper Say About the ‘Halving’?

Interestingly, Bitcoin halving is not mentioned directly in the Bitcoin white paper, as the term ‘halving’ is not used. However, the paper does discuss the limited supply of bitcoins and the mechanisms in place to control the creation of new coins. 

In particular, the white paper states that the capped number of bitcoins to be created is 21 million, and the rate at which new coins are created or mined will be halved approximately every four years. This is the mechanism that underlies the halving process. 

In section 6 of the Bitcoin white paper, the philosophy behind the idea is described:

“The steady addition of a constant amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended.”

And section 4 of the Bitcoin white paper explains the Proof of Work (PoW) mechanism:

“The proof-of-work also solves the problem of determining representation in majority decision making.

If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it.”


“To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they’re generated too fast, the difficulty increases.”

Final Words: Should BTC Holders Worry About Bitcoin Halving?

Bitcoin halving is a pre-programmed event aimed at lowering inflation by reducing the amount of new bitcoins created. The impact on value can vary and is influenced by many factors. 

As such, it is important to understand the halving as one of many factors that may have an influence on the value of Bitcoin, while also taking into account other factors.

How does Bitcoin work behind the scenes? Find out in this deep dive on the technical details of Bitcoin.

How to Trade Bitcoin With

BTC can be purchased in the App. Sign up for an account in minutes to purchase Bitcoin with 20-plus fiat currencies, using a credit/debit card, or bank transfer. Download the App to purchase Bitcoin today.

Alternatively, Bitcoin can be traded on the Exchange. Users can deposit crypto to the Exchange in order to trade BTC with deep liquidity and low fees. Sign up for the Exchange to start trading today.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by to invest, buy, or sell any crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

In addition, the Exchange and the products described herein are distinct from the Main App, and the availability of products and services on the Exchange is subject to jurisdictional limits. Before accessing the Exchange, please refer to the following link and ensure that you are not in any geo-restricted jurisdictions for Spot Trading

Past performance is not a guarantee or predictor of future performance. The value of digital assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a digital asset, it’s essential for you to do your own research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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Frequently Asked Questions

Cryptocurrency is a digital or virtual currency that operates on distributed ledger technology called a blockchain and uses cryptography for security. It is decentralized and operates independently of a central bank.
Unlike traditional currencies, cryptocurrencies are not backed by a physical commodity or government, and their value is determined by market demand and supply. Cryptocurrencies can be used to buy goods and services, transfer funds, and trade in markets. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, Ripple, and Cronos.
Many cryptocurrencies, like Bitcoin, are created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on a blockchain. This mechanism is also called Proof of Work (PoW). Another consensus mechanism that has increased in popularity — as it is more energy efficient — is Proof of Stake (PoS). Instead of mining, PoS relies on network participants validating transactions. Ethereum, the second-largest cryptocurrency, uses this consensus mechanism.
Bitcoin is a cryptocurrency that operates on a peer-to-peer (P2P) network. It was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. Bitcoin is the first and most well-known cryptocurrency, and it has gained significant popularity and value since its creation.
Unlike traditional fiat currency, which is controlled by central banks and governments, Bitcoin operates independently of any central authority. Transactions are verified and recorded on the blockchain, which is a distributed ledger that maintains a permanent and transparent record of all transactions.
Bitcoin can be bought, sold, and exchanged on various cryptocurrency exchanges, and it can be used to purchase goods and services from merchants that accept Bitcoin as a form of payment. The supply of bitcoins is limited to 21 million units, and new bitcoins are created through mining, which involves using specialized computer hardware to solve complex mathematical equations.
Bitcoin is known for its high volatility, and its value can fluctuate rapidly in response to market conditions, news events, and other factors. Many traders, including institutional investors, see Bitcoin as a store of value and a way to participate in the growing cryptocurrency ecosystem.
There are several ways to buy cryptocurrencies, including:
  1. Brokerage services: Crypto brokers allow users to simply buy and sell cryptocurrencies. A popular example is the App, trusted by over 80 million users. It is available at the Apple Store and on Google Play.
  2. Cryptocurrency exchanges: These are online platforms where users can buy, sell, and trade cryptocurrencies using fiat currency or other cryptocurrencies. They offer more complex functions compared to a crypto brokerage, adding trading instruments like crypto derivatives. The Exchange is an example of a popular crypto exchange.
  3. Peer-to-peer (P2P) marketplaces: These are platforms where buyers and sellers can directly trade cryptocurrencies without the involvement of a third-party exchange. This is also known as DeFi, short for decentralized finance. Multiple P2P crypto marketplaces can be accessed all in one app via the DeFi Wallet.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
To buy crypto, follow these general steps:
  1. Choose a crypto platform to use, like the Exchange or App.
  2. Create an account on the chosen platform by providing personal information and ID verification, also known as ‘Know Your Customer’ (KYC) procedures.
  3. Deposit fiat currency or another cryptocurrency into the newly created account. The App supports bank transfers, credit cards, debit cards, and cryptocurrency transfers to buy crypto, depending on region.
  4. Navigate to the ‘Buy’ section of the Exchange or App and select the crypto to buy.
  5. Enter the amount of cryptocurrency to buy and confirm the transaction.
  6. The crypto will be deposited into the account. From here, it can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
Users can buy Bitcoin from a cryptocurrency exchange, a crypto brokerage service like the App, or a peer-to-peer (P2P) marketplace like those found in the DeFi Wallet. Here are some general steps to buying bitcoin from an exchange or brokerage service:
  1. Choose a reputable cryptocurrency platform that supports Bitcoin trading. Popular options include the App and the Exchange.
  2. Create an account on the chosen platform and complete the KYC verification process, which may require providing personal identification documents.
  3. Fund an account using a bank transfer, credit/debit card, or other cryptocurrency, depending on region.
  4. Navigate to the ‘Buy’ section of the platform and select Bitcoin as the cryptocurrency to buy.
  5. Enter the amount of bitcoin to buy, or the amount of fiat or cryptocurrency to spend.
  6. Review the transaction details and confirm the purchase.
  7. Once the transaction is complete, the bitcoin will be deposited into the chosen account. From here, the funds can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
To trade cryptocurrency, follow these general steps:
  1. Choose a cryptocurrency exchange that supports trading. A popular option is the Exchange.
  2. Create an account on the chosen platform and perform ID verification, known as KYC (‘Know Your Customer’).
  3. Deposit funds into the newly created account using a supported payment method. The Exchange supports bank transfers and credit/debit cards.
  4. Navigate to the trading section of the platform and select the cryptocurrency pair to trade.
  5. Choose whether to buy or sell the cryptocurrency, and enter the amount to trade.
  6. Set the preferred price and order type. There are several types of orders, including market orders, limit orders, stop orders, and crypto options, which allow users to buy or sell at a specific price or under certain conditions.
  7. Submit the trade order and wait for it to be executed. Depending on market conditions, the trade may be filled immediately, or it may take time to be filled.
  8. Monitor trades and adjust strategies as necessary.
Here is an introduction to trading on the Exchange.
It is crucial to note that trading cryptocurrency carries risk, and it is important to trade only what you can afford to lose.
There are several ways to earn cryptocurrency, including:
  1. Mining: Cryptocurrency mining involves using specialized computer hardware to solve complex mathematical equations that validate transactions on a blockchain network. Successful miners are rewarded with newly minted cryptocurrency for their efforts.
  2. Staking/Lockups: Staking and lockups involve holding or locking up a certain amount of cryptocurrency in a wallet or on a platform to support the operations of the blockchain network. Stakers are rewarded with new cryptocurrency as a form of interest for their support.
  3. Trading: Trading cryptocurrency involves buying and selling cryptocurrencies on exchanges or other trading platforms. Those who have a good understanding of market trends and are able to make informed trading decisions can earn profits through trading.
  4. Airdrops: Airdrops are free distributions of cryptocurrency to users who meet certain criteria or participate in promotional activities.
  5. Crypto Projects: Some blockchain projects offer rewards or bounties for users who contribute to their development or community. This can include activities like bug bounties, testing, or content creation.
It's important to note that each method of earning cryptocurrency carries its own risks and rewards. It is recommended to carefully research cryptocurrencies and understand the process before buying. Learn more about the crypto market at University.

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