What is Bitcoin halving? A trader’s guide

Learn all about bitcoin halvings, including how they work, their potential impact, and what they mean for BTC traders.

What is bitcoin (BTC) halving?

Bitcoin halving is a key event in BTC’s lifecycle that reduces the rewards miners earn for adding new blocks to the blockchain by half. Built into bitcoin’s protocol, halvings occur approximately every four years, or after 210,000 blocks, based on an average block production time of 10 minutes.

This mechanism impacts BTC’s scarcity by slowing the rate at which new tokens are created. It’s a fundamental feature of bitcoin’s design to ensure the total supply never exceeds 21 million tokens, making it a finite digital asset akin to gold – though its scarcity is governed by code rather than physical constraints.

Historically, halving events have influenced bitcoin’s market dynamics, often sparking speculation among traders due to their potential effects on supply and demand. However, outcomes can vary, reflecting the complex interplay of market factors.

How does BTC halving work?

BTC halving gradually slows the introduction of new BTC into circulation, and reduces the reward that bitcoin miners receive for adding a new block to the blockchain by half.

Here’s more on how it works:

Mining rewards reduction – the reward miners receive for validating a block on the blockchain is reduced by 50% every 210,000 blocks, approximately every four years. In 2009, miners earned 50 BTC per block. In 2020, this reduced to 6.25 BTC, and after 2024 halving, it dropped to 3.125 BTC. This systematic reduction ensures that the total supply of bitcoin will never exceed 21 million coins.
Block-triggered intervals – BTC’s issuance schedule is governed entirely by its code. Halving events are not tied to specific calendar dates but are instead triggered once a set number of blocks have been mined. This precision ensures the halving happens at roughly four-year intervals.
Scarcity through fixed supply – the gradual reduction of mining rewards not only slows the introduction of new BTC into circulation but also reinforces its scarcity. This scarcity is enforced through bitcoin’s code, distinct from physical commodities like gold. The total supply helps to ensure predictability in BTC’s issuance schedule.
Impact on miners – halving directly affects miners’ profitability. With rewards halved, miners need to offset reduced earnings through other means, such as higher transaction fees. For smaller or less efficient miners, this drop in income may force them to exit the market, consolidating mining operations among larger, more resourceful entities.

Halving events may generate significant attention, often leading to speculation about BTC’s price. While historical patterns suggest price increases following halving events, this is not guaranteed. BTC halvings could also introduce short-term price volatility, depending on shifting miner behaviour and market sentiment.

Please note that past performance doesn’t guarantee future results.

What are BTC miners?

Bitcoin miners validate transactions and secure the network, earning rewards that halve approximately every four years. Bitcoin Cash mining follows a comparable proof-of-work mechanism, with distinct block rewards and difficulty adjustments.

When was the last BTC halving?

BTC halvings trigger once a specific number of blocks have been mined, which is pre-programmed into the underlying code that powers the bitcoin network. These events are anticipated every four years, and the last bitcoin halving occurred in 2024.

When is the next BTC halving?

The next bitcoin halving will take place once 1,050,000 blocks have been mined, projected to occur in April 2028.This estimate is based on bitcoin’s average block time of roughly 10 minutes per block. With 210,000 blocks mined between each halving, the time required to reach the next halving is generally around four years.

Bear in mind that changes in BTC mining activity and network hash rate can slightly adjust this timeframe. Bitcoin’s protocol includes a difficulty adjustment mechanism, which aims to maintain a consistent block production time of approximately 10 minutes.

Significant increases or decreases in computational power could still influence the exact timing of the halving, and while these variations are generally minor, they underscore the dynamic nature of the bitcoin network.

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Predictions: what will happen in the next BTC halving?

When it comes to predictions for the next BTC halving, analysts and traders are closely watching to see if historical patterns hold. As the first cryptocurrency and the largest by market capitalisation, BTC’s price movements often set the tone for the broader crypto market, including altcoins. Halving events, in particular, tend to create ripples throughout the industry.

Before the most recent halving, Valerio Baselli, Senior International Editor at Morningstar, noted that bitcoin’s ‘market dynamics are unique in the history of cryptocurrency’, pointing to BTC’s increasing value and the potential for significant market reassessment during a halving event.

Looking at the bitcoin halving chart below, we can observe a trend of diminishing post-halving gains. While this pattern provides clues, the unique market conditions surrounding each halving ensure that future outcomes remain a subject of speculation and debate.

Source: Coinmarketcap.com

2013 – a year after the first bitcoin’s first ever halving – BTC’s price increased 8,236.02%.
2017 – a year after bitcoin’s second halving – BTC’s price increased 286.99%
2021 – a year after bitcoin’s third halving – BTC’s price increased 559.24%.
2025 – BTC’s price rises at a slower pace compared with prior halving events.

The next Bitcoin halving will occur at block height 1,050,000, reducing miners’ rewards from 3.125 BTC to 1.5625 BTC per block. This event will further limit the rate of new bitcoin entering circulation, contributing to its perceived scarcity.

If current conditions persist, the fifth BTC halving is projected for April 2028, the sixth for April 2032, and the seventh for April 2036. However, these dates are estimates based on an average block production time of 10 minutes, which can fluctuate due to changes in mining activity and network conditions.

Prepare for the next bitcoin halving – discover top analysts’ latest BTC price predictions and learn about trading strategies with our trader’s guides.

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FAQs

How many BTC halvings are left?

The exact number of halvings remaining depends on the remaining supply of unmined BTC. As of now, there are approximately 30 halving events left. Halvings occur roughly every four years and will continue until the maximum supply of 21 million BTC is reached, likely around the year 2140. Each halving reduces the block reward, which could impact mining incentives and market dynamics over time.

How does halving affect BTC’s price?

Bitcoin halving events have historically been followed by price increases, but this is not guaranteed, and past performance isn’t a reliable indicator of future results.

The reduction in the growth of supply typically increases scarcity, which can drive demand. However, price movements are also influenced by broader factors such as market sentiment, adoption, and macroeconomic conditions. Traders might consider approaching halving events with a balanced strategy, considering both potential rewards and risks.

Will miners stop mining after all BTC are halved?

No, miners will not stop mining after all BTC is mined. Once the maximum supply is reached, miners will rely on transaction fees instead of block rewards for income. The long-term sustainability of mining will depend on the volume of transactions and the fees they generate. As the Bitcoin network matures, improvements in scalability and wider adoption are expected to play a crucial role in sustaining miner activity.