Bitcoin Halving - What Is It and How It Affects BTC Price

What is Bitcoin Halving

To enter circulation, a Bitcoin has to be mined. As the name suggests, Bitcoin halving is the process through which the amount of Bitcoin that can enter circulation after being mined is cut in half. This process occurs after every 210.000 blocks have been mined, which is estimated to be once every four years.

The purpose of Bitcoin halving is to reduce the inflation rate caused by new coins entering circulation. It also means that, at some point in the future, the mining process will end.  

What Happens to Bitcoin Price After Halving?

Halving has a direct impact on Bitcoin prices. Because each mining reward will be half of what it was, it is expected that the value of Bitcoin will go up after each halving. This is a result of the fact that the supply decreases while the demand is either the same or goes higher.

Up to this point, halving occurred three times: November 28, 2012, July 9, 2016, and May 18, 2020. After each halving, the price of Bitcoin continued to rise and peaked after approximately 1,5 years after the halving event. We're still waiting to see if the trend continues with the third halving. The peak should occur around November 2021. 

Future Bitcoin Halving Dates

Bitcoin Halving 2024

As we mentioned before, the halving occurs after every 210.000 blocks have been mined. The next halving event should occur in 2024, at block 840,000, where the block reward will drop to 3.125 BTC. This would be the fourth halving of Bitcoin.

Bitcoin Halving 2028

After that, we can expect the next halving to occur in 2028, at block 1,050,000, where the block reward will drop to 1.5625. 

Bitcoin Halving 2032

The last important halving event is the sixth one. It is expected to take place in 2032, on block 1,260,000. After it, the block reward will drop to 0.78125.

So why is this halving important?

Well, it will mark the mining of 99% of all the Bitcoin coins. Basically, at this point, 20.790.000 out of a total of 21.000.000 Bitcoins would have been mined at this point.

Experts believe that at this point, mining will probably drop significantly since the rewards are so small. Still, if Bitcoin price continues to rise and reach $1 million, as some experts believe, miners will still have enough incentives to continue. 

Only time will tell what will happen.

End of Mining New Bitcoin

So, when will mining new Bitcoin end?

At the current rate, this should happen in the year 2140. Even so, the miners would still be incentivized to mine and confirm the transactions due to the fact that the value of the fees paid to miners would rise in the future. This is because there will be a greater transaction volume with fees and a greater market value of the Bitcoins themselves.

Bottom Line

Bitcoin halving is intended to reduce the rate at which the new coins are created and lower the available supply.

Up until now, halving resulted in an increase of Bitcoin value, as miners have to make up for the costs associated with mining Bitcoin, which has now doubled.

When we look at bitcoin halving dates, in the first halving in 2012, BTC went from $12 to $1.200. On the second halving, Bitcoin went from $647 to $19.300.

On the most recent halving, Bitcoin went from $8.800 to $63.000 and eventually dropped to its current point of $31.000. The price can still rise by the end of the year and set a new all-time high, just like it did after the previous two halvings.  

There are more factors than just halving when it comes to the value of Bitcoin; however, halving has historically impacted its value tremendously. Only time will tell how far Bitcoin value will rise with each halving.

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