ONGOING
Learn what Bitcoin's halving event is, why it happens, how it has historically affected price, and what to expect from future halvings in 2026.
What is the Halving? Bitcoin's Programmatic Supply Control
The halving is an event built into Bitcoin's code that cuts the block reward paid to miners exactly in half, occurring approximately every four years (or precisely every 210,000 blocks).
When Bitcoin launched in 2009, miners received 50 BTC for each block they successfully added to the blockchain. In 2012, the first halving reduced this to 25 BTC. In 2016, it fell to 12.5. In 2020, to 6.25. The most recent halving in April 2024 reduced the reward to 3.125 BTC per block.
The halving continues until approximately 2140, when the maximum supply of 21 million Bitcoin will have been mined. After that, miners will be compensated solely by transaction fees. The entire schedule is hardcoded and transparent, making Bitcoin's monetary policy the most predictable of any major asset in existence.
Why the Halving Matters: Supply Shock and Miner Economics
The halving matters for two distinct reasons: its effect on the supply of new Bitcoin entering the market, and its effect on miner profitability.
On the supply side, each halving cuts the daily issuance of new Bitcoin roughly in half. Before the 2024 halving, approximately 900 new BTC were issued daily. Afterward, roughly 450. If demand remains constant and supply issuance halves, basic economics suggests upward price pressure. This supply shock narrative is a central part of the Bitcoin investment thesis.
On the miner economics side, halvings are an acute stress test. Miners whose operations are unprofitable at the new, lower reward rate must shut down or upgrade their hardware. This temporarily reduces network hashrate before efficiency improvements and a potential price increase restore profitability for the remaining miners.
Historical Price Patterns Around Halvings
The three completed Bitcoin halvings have each been followed by significant bull markets, though the relationship is more nuanced than simple cause and effect.
Following the 2012 halving, Bitcoin rose from roughly $12 to $1,100 over the following year. Following the 2016 halving, it rose from roughly $650 to nearly $20,000 over eighteen months. Following the 2020 halving, it rose from roughly $8,500 to nearly $69,000 over about eighteen months.
However, correlation is not causation. Each of these bull markets also coincided with other catalysts: growing mainstream awareness after 2012, institutional interest after 2016, and unprecedented monetary stimulus plus early institutional adoption after 2020. The halving narrative may become self-fulfilling simply because so many participants expect it to matter, which drives buying behavior in anticipation of the event.
The Long-Term Significance: Transition to Fee-Based Security
Looking beyond individual halving cycles, the halvings collectively tell a story about Bitcoin's long-term security model.
Currently, miner revenue is dominated by block rewards. As the reward continues to halve every four years, transaction fees must eventually become the primary source of miner compensation. Whether the Bitcoin network will generate sufficient fee revenue to maintain adequate security once block rewards become negligible is a genuine open question and one of the most important long-term debates in Bitcoin.
Proponents argue that as Bitcoin becomes more widely used and valued, transaction fee revenue will naturally grow to compensate miners adequately. Skeptics argue that competition from Layer 2 networks reduces on-chain transaction volume, which could suppress fee revenue precisely when it needs to grow.
This debate will play out over decades, making it a long-term consideration rather than an immediate concern.
What the 2024 Halving Means Looking Forward
The April 2024 halving coincided with and followed several other significant Bitcoin developments: the approval of spot Bitcoin ETFs in the US in January 2024, growing sovereign wealth fund and pension fund interest, and increasing corporate treasury adoption.
This combination of supply reduction through the halving and dramatically increased demand access through regulated investment vehicles created a different market dynamic than previous halving cycles. The supply available for these new institutional buyers tightened just as access expanded.
The next halving is expected around 2028, when the block reward will fall to approximately 1.5625 BTC. By that point, the daily issuance of new Bitcoin will be minimal relative to the existing supply, and the halving's mathematical impact on daily supply will be smaller in absolute terms, though still meaningful in percentage terms.
The Halving: A Predictable Event in an Unpredictable Market
The Bitcoin halving is one of the few genuinely predictable events in crypto. Its timing is known years in advance, its mathematical effect on supply is exact, and its historical correlation with subsequent bull markets is documented.
What it cannot do is guarantee future price appreciation. Markets are forward-looking and participants aware of the halving will price in its effects to varying degrees in advance. Each halving occurs in a different macroeconomic environment with different levels of institutional adoption and different competing narratives.
What the halving does demonstrate, reliably, is the elegance of Bitcoin's programmatic monetary policy: a predictable, immutable supply schedule that no government, company, or individual can alter. That predictability is itself a core part of Bitcoin's value proposition.
This information, including any opinions and analyses, is for educational purposes only and does not constitute financial advice or recommendation. You should always conduct your own research before making any investment decisions and are solely responsible for your actions and investment decisions.
The services of Freedx are not directed at, or intended for use by residents of the United States, Canada, and the United Arab Emirates, nor by any person in any jurisdiction where such use would be contrary to local laws or regulations.
© 2025 Freedx, All Rights Reserved