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Does Bitcoin half every 4 years?

Bitcoin, the world’s first and most popular cryptocurrency, operates on a unique economic model that utilizes programmed supply scarcity to create value. A key component of this model is Bitcoin’s halving – an event that occurs approximately every 4 years and reduces the rate at which new bitcoins enter circulation by 50%.

What is Bitcoin’s halving?

Bitcoin’s supply is capped at 21 million coins, a limit that is hardcoded into the protocol and cannot be changed. New bitcoins are introduced into the system as rewards for a process known as “mining.” Miners use specialized hardware to verify and record Bitcoin transactions onto a public ledger known as the blockchain. As compensation, they receive newly created bitcoins.

When Bitcoin first launched in 2009, the mining reward was set at 50 bitcoins per block. A new block is mined roughly every 10 minutes. In 2012, the first halving occurred, and the mining reward dropped to 25 bitcoins per block. Four years later, in 2016, it halved again to 12.5 bitcoins. On May 11, 2020, the third halving took place, reducing the mining reward to just 6.25 bitcoins per block.

This process will continue every 210,000 blocks, or approximately every 4 years, until the maximum supply of 21 million bitcoins has been generated. Each halving gradually decreases the supply of new bitcoins until mining activities cease entirely. Currently, around 19 million bitcoins are in circulation.

Why does Bitcoin halve?

Bitcoin was designed to mimic the extraction of natural resources like gold. Gold mining follows a predictable decay curve: the more finite resource is extracted, the more difficult future extraction becomes. Bitcoin’s creator(s) wanted to replicate this reliable narrative of digital scarcity. They knew that a predetermined supply schedule would heighten Bitcoin’s appeal as a store of value.

The halving mechanism serves two key purposes:

  • It controls the pace at which new bitcoins enter circulation, keeping inflation under control.
  • It ensures the supply grows at an ever-diminishing rate until the 21 million cap is reached. This increasing scarcity is intended to appreciated the value of existing bitcoins.

Without scheduled halvings, miners could theoretically produce bitcoins infinitely, potentially risking runaway inflation. The halving events constrain Bitcoin’s inflation rate and ensure it converges to zero over time as the supply limit is approached.

When is the next Bitcoin halving?

The next Bitcoin halving is estimated to occur in early 2024, approximately 4 years after the 2020 halving. The exact date will depend on Bitcoin’s block production time over the coming years. At the current 10 minute average block time, estimates suggest it will occur in March 2024.

Here is a table summarizing the previous and projected Bitcoin halving dates and effects:

Halving Number Approximate Date Mining Reward
1 November 28, 2012 25 BTC
2 July 9, 2016 12.5 BTC
3 May 11, 2020 6.25 BTC
4 March 2024 (est.) 3.125 BTC

As shown, each halving cuts the mining reward in half. The process will continue until mining rewards reach essentially zero.

Halving effects on price and mining

Historically, Bitcoin halvings have coincided with monumental bull runs and spikes in value. Some key effects include:

Reduced mining rewards

The reduced block subsidies directly impact the revenues and profitability of miners. With each halving, miners receive fewer new bitcoins for the same effort. Many less efficient miners are forced to shut down operations.

Increased scarcity

The rate of new bitcoin releases is effectively cut in half, making existing bitcoins more scarce on the open market. Assuming demand holds steady, constrained supply typically leads to higher prices.

Increased difficulty

Bitcoin is programmed to self-adjust the difficulty of its mining process every 2,016 blocks, or roughly every 2 weeks, in order to maintain a block production time of 10 minutes. As inefficient miners shut down after the halving, difficulty adjustments make mining even more challenging for the remaining miners.

Higher energy usage

Paradoxically, halvings lead to greater energy consumption. As mining bitcoins becomes less profitable, miners typically upgrade to newer, more powerful (and energy intensive) hardware to remain competitive.

Higher prices

Due to reduced selling pressure from miners, increased difficulty and energy demands, perceived scarcity, and growing media hype, the halvings tend to catalyze appreciation in Bitcoin’s price over the following 12-24 months. The previous two halvings saw Bitcoin’s price rise dramatically after minimally sustained drops immediately following the events.


Bitcoin’s quadrennial halving events play a pivotal role in constructing Bitcoin’s narrative of digital scarcity. By reducing the block reward given to miners by 50% roughly every 4 years, the halvings constrain Bitcoin’s inflationary supply schedule until the 21 million hard cap is reached. Historically, these programmed supply shocks have driven appreciation in Bitcoin’s market value while further securing the network. The next halving is expected sometime in March 2024, with many investors already anticipating the typical bullish price action in the following months and years.