Next Bitcoin Halving – Everything You Need to Know

The upcoming Bitcoin halving is a much-anticipated event in the crypto space.

According to Bloomberg, the next Bitcoin halving is expected in April 2024 and will be the fourth time that the mining reward is reduced by 50% – meaning that fewer BTC tokens enter the circulating supply.

In this guide, we explore why Bitcoin halving is important, how it can impact its value, and tips on how to trade it for maximum gains.

What is Bitcoin Halving?

‘Bitcoin halving’ is an important event in the broader crypto market. And with so many people using Bitcoin on a daily basis understanding the halving events is important. Put simply, approximately every four years, the Bitcoin network will reduce the amount of new BTC tokens that enter circulation. For those new to Bitcoin, the Blockchain Council explains that the network adds 6.25 BTC tokens to the ecosystem every 10 minutes. Originally, this figure stood at 50 BTC.

It was then reduced to 25 BTC, then 12.5 BTC. The next Bitcoin halving 2024 will once again reduce this, from 6.25 BTC down to 3.125 BTC. So why does this matter? Well, Bitcoin is a tradable asset. And like all tradable assets, its value is determined by demand and supply. Crucially, if fewer tokens are entering the circulating supply, this makes Bitcoin more scarce. Should Bitcoin retain its demand, this can increase its value.

The reasoning behind Bitcoin’s halving mechanism is two-fold. First, by gradually reducing the supply of new tokens, this ensures that Bitcoin avoids excessive inflation. Second, this makes the supply of Bitcoin more scarce over time. This is not too dissimilar to precious metals like gold. This is because there is only so much gold that can be mined before it runs out. As such, mining levels will reduce as its finite supply gets closer.

Crucially, just like gold, Bitcoin is also a finite asset. This is because the total supply of Bitcoin is limited to 21 million tokens. Bitcoin’s maximum supply is expected to be reached in 2140, as explained by Coinbase. Seasoned investors are paying close attention to the next Bitcoin halving. Historically, demand for Bitcoin increases as the halving event approaches. As such, some investors are loading up on Bitcoin while prices are still low, considering BTC is trading 55% below its all-time high.

How Does Bitcoin Halving Work?

Now that we’ve covered the basics, we will now explore how the Bitcoin halving mechanism works in much more detail.

10-Minute Block Cycles

First and foremost, it is important to understand how new Bitcoin tokens are added to the circulating supply. Bitcoin is a decentralized network, meaning that transactions are not processed by intermediaries, like banks. Instead, transactions are verified by miners.

  • Miners connect hardware to the Bitcoin network via specialist devices.
  • Every 10 minutes, miners will attempt to verify a block of transactions.
  • The mining device will aim to solve complex mathematical equations, generated randomly by the Bitcoin network.
  • The first miner to successfully solve the equation will verify the respective block of transactions.
  • In doing so, miners receive newly minted Bitcoin. Currently, the mining reward stands at 6.25 BTC.

The above process happens every 10 minutes. As such, 6.25 BTC enters the circulating supply every 10 minutes, or 900 BTC every 24 hours. Based on current BTC/USD prices, this means that more than $27 million worth of Bitcoin enters the market every day.

Reduced Mining Rewards

One of the main issues facing traditional ‘fiat’ currencies is inflation. This is a result of irresistible central bank policies, where more money is ‘printed’ and added to the financial system. Over time, this reduces the value of money and, ultimately – people’s wealth.

This is why the Bitcoin halving mechanism is so important. Put simply, by halving the amount of new BTC tokens that enter the ecosystem, this preserves the long-term value of Bitcoin. After all, if the circulating supply is reduced over time, Bitcoin avoids excessing inflation.

 

According to CNBC, the Bitcoin halving event happens every 210,000 blocks. As noted earlier, there is a newly minted block every 10 minutes. So that’s 144 blocks per day. As such, 210,000 blocks amount to approximately four years. While the underlying technology is complex, the Bitcoin halving concept is simple:

  • Every 210,000 blocks, or four years, the amount of new Bitcoin entering circulating is reduced by 50%
  • When Bitcoin was launched in 2009, each 10-minute block produced 50 new BTC tokens.
  • This has since been reduced to 25 BTC, 12.5 BTC, and now currently – 6.25 BTC.
  • As such, the next Bitcoin halving will reduce the 10-minute block reward to 3.125 BTC

After that, 2028 and 2032 will see the amount of new Bitcoin entering the market reduced to 1.5625 BTC and 0.78125 BTC, respectively. This is a huge decline from the original 50 BTC in 2009.

Naturally, this reduces the circulating supply and ensures Bitcoin becomes more and more scarce. This will continue to be the case until 2140, when Bitcoin is expected to reach its maximum supply of 21 million BTC. Once this happens, there will be no new BTC. Unlike traditional currencies, this means that Bitcoin will become a deflationary asset – more on this later.

Post 21 Million BTC Tokens

Bitcoin will not reach its maximum supply of 21 million tokens for another 117 years. But as an investor, it is still important to consider what happens after Bitcoin’s cap is reached.

As we mentioned, every 10 minutes, Bitcoin miners are rewarded with newly minted BTC tokens. Currently, that’s 6.25 BTC every 10 minutes, and just one miner will be successful in verifying the block.

In addition, Miners also receive a share of Bitcoin transaction fees that are paid when transferring tokens. This is bundled into the block reward, meaning additional revenue for Bitcoin miners.

Total Transaction Fees (BTC)

In the prior 24 hours, daily Bitcoin transaction fees amounted to approximately 30 BTC, as per Blockchain.com. Back in May 2023, when the Bitcoin network experienced increased activity, daily transaction fees hit 625 BTC.

Nevertheless, when Bitcoin reaches its maximum supply of 21 million tokens, miners will only earn the transaction fees included within the respective block. In other words, rewards will no longer include newly minted Bitcoin, as the total supply has already been reached.

Understanding the Reasoning Behind Bitcoin Halves?

It is important to note that the Bitcoin halving mechanism is not arbitrary. On the contrary, there are a variety of reasons why the Bitcoin network was developed in this way.

Below, we discuss why Bitcoin halving events are important to the broader success of its ecosystem.

Inflation Control

Perhaps most importantly, the Bitcoin halving event ensures that inflation remains under control. In fact, unlike central bank policies, we can confidently predict the future supply of Bitcoin based on its underlying code. Once again, approximately every four years, newly minted Bitcoin will reduce by 50%. As the Bitcoin code is immutable, this mechanism will not change.

To understand the importance of Bitcoin’s inflationary control, we need to make comparisons to traditional fiat currencies.

  • In a nutshell, fiat currencies like US dollars and British pounds are controlled by central banks.
  • In this example, that’s the US Federal Reserve and the Bank of England.
  • Central banks determine the future supply of their currency.
  • Crucially, central banks can create money ‘out of thin air’, a process known as ‘quantitative easing‘.
  • In simple terms, quantitative easing is the process of adding new money to the overall supply of an economy.

So why is quantitative easing an issue? Well, adding new money to the overall supply reduces the value of the currency. In other words, the purchasing power of the currency is reduced.

A direct result of this is inflation. With more money in supply, the cost of goods and services increases. Consider that in response to the COVID-19 pandemic, more than $3.3 trillion was printed by the US Federal Reserve in 2020 alone. Even more alarmingly, this figure amounts to 18% of the total supply of US dollars in circulation. In line with other reckless central bank policies, this led to a global ‘cost of living crisis’, as explained by the International Monetary Fund.

In contrast, there is no risk that Bitcoin will follow the same path. Until the total supply of Bitcoin is reached, every new BTC token that enters circulation is predictable and fixed. Ultimately, we know how many tokens will enter circulation every 10 minutes until 2140. But just how many Bitcoins are there? At this point, all 21 million Bitcoin tokens will have been minted, as no more will ever exist.

Scarcity 

A major benefit of Bitcoin’s supply mechanism is that it creates scarcity. For example, the fact that only 21 million tokens will ever exist means Bitcoin is a store of value. Just like gold, this means that the total amount of Bitcoin can never exceed its overall supply limits.

This is important from an investment perspective. As the supply of Bitcoin gets closer to its cap, its intrinsic value increases. This is because there is less Bitcoin being injected into the market. Of course, this is on the assumption that there is continued demand for Bitcoin.

If demand for Bitcoin increases while its supply is limited, its value will appreciate. This is just the nature of market forces – as seen over the course of time with gold.

Next Bitcoin halving

For example, according to the National Mining Association, gold was valued at $18.93 per troy ounce in 1833. Today, gold is valued at $1,905 per troy ounce. This is an increase of nearly 10,000%.

Now consider that an estimated 190,000 tonnes of gold have been mined, as per the BBC. The same BBC report notes that an estimated 50,000 tones of gold are yet to be mined. This means that nearly 80% of the total supply of gold has already been mined and is currently in circulation. Once gold reaches its estimated total supply of 240,000 tonnes, no more will ever exist.

These figures are reminiscent of Bitcoin. According to Businessinsider.com, 19.4 million – or about 92% of the total Bitcoin supply has already been mined. Just like gold, once the supply total is reached, no more Bitcoin will exist. This is why Bitcoin is considered the best cryptocurrency to buy.

Market Impact

Bitcoin wasn’t created as a store of value, nor an investment product. Instead, Bitcoin was created as a medium of exchange, allowing people to transact without intermediaries or government control.

However, the reality is that the vast majority of people buy Bitcoin as an investment product. With this in mind, Bitcoin’s scarcity and inflationary controls appeal to many investors. This is reflected in its historical price action.

As per CoinMarketCap data, Bitcoin was worth $0.06 in 2011. 10 years later, Bitcoin hit an all-time high of over $68,000. This means that in just over a decade, Bitcoin appreciated by nearly 110 million percent. While similar growth is unlikely, many believe that Bitcoin will continue to appreciate over time.

Currently, Bitcoin was a market capitalization of over $580 billion. While estimates vary, it is believed the total market capitalization of all circulating gold could be over $12 trillion.  Considering that Bitcoin has more use cases than gold (such as a convenient medium of exchange), its current value could be just a small fraction of its true potential.

When is the Next Bitcoin Halving Cycle?

Wondering when is the next halving of Bitcoin?

Put simply, the next Bitcoin halving date is estimated to happen in April 2024. More specifically, the halving will take place on block number 840,000.

Some might be wondering why estimates are needed if we know that newly minted Bitcoin enters circulation every 10 minutes. The reason for this is that while Bitcoin averages a block time of 10 minutes, this isn’t always the case. In fact, the Bitcoin block time often deviates by a few seconds. In some instances, the block time can deviate by a few minutes.

Bitcoin block time

For example, according to BitInfoCharts data, the average Bitcoin block time over the prior 24 hours was just over 13 minutes. A day previous, this was down to 9 minutes and 41 seconds. Back in April, block times hit lows of just under 8 minutes.

While since its inception in 2009, Bitcoin has averaged 10-minute block times, this deviation means the exact time and date of the next halving is currently an estimation. Nearer to the time in April 2024, we will have a much more accurate outlook on when the next Bitcoin halving will happen.

Why Do Bitcoin Block Times Vary?

  • The Bitcoin network has a ‘difficulty’ mechanism built into it.
  • This determines the complexity of the cryptographic equation that needs to be solved to successfully mine a block.
  • The Bitcoin difficulty will rise and fall in line with network conditions.
  • For example, how many miners are competing with one another and how much network demand there is.
  • Crucially, when the network difficulty increases or decreases, this can have an impact on the block time.
  • This averages out over the course of time to 10-minute intervals.

Bitcoin Halvings – A Complete Breakdown

Now that we have answered the question: When’s the next Bitcoin halving? – Let’s summarize our findings.

The table below offers insight into previous and future Bitcoin halving events. Do note that the dates are estimated based on current block time trends.

Halving Date Block Number Block Reward (BTC) Total New Bitcoins
0 Jan 2009 0 50.00 0
1 Nov 2012 210,000 25.00 10,500,000
2 Jul 2016 420,000 12.50 5,250,000
3 May 2020 630,000 6.25 2,625,000
4 April 2024 840,000 3.125 1,312,500
5 Expected 2028 1,050,000 1.56250 656,250
6 Expected 2032 1,260,000 0.78125 328,125
7 Expected 2036 1,470,000 0.390625 164,063
8 Expected 2040 1,680,000 0.1953125 82,031
9 Expected 2044 1,890,000 0.09765625 41,016
10 Expected 2048 2,100,000 0.048828125 20,508

Just remember, each Bitcoin halving event takes place after 210,000 verified blocks. Considering the average block time can vary, specific dates will only become clearer nearer the time.

What Happens to My Bitcoin During a Halving?

The simple answer is nothing. The amount of Bitcoin held will remain the same before, during, and after the halving event. The Bitcoin halving will simply reduce the number of new tokens that enter the market after each block.

History of Bitcoin Halving Events

So far, we have answered the question: When is the next Bitcoin halving event? We have also discussed the demand and supply of Bitcoin and how this impacts its future value.

Next, it is important to look at how the markets have historically reacted to previous Bitcoin halvings. Not only in the build-up to the halving event but in the months to follow.

Based on the market forces of demand and supply, one would assume that the price of Bitcoin appreciates when the halving event occurs. But is this the case?

Let’s look at some examples.

2020 Bitcoin Halving

Let’s start with the most recent Bitcoin halving event, which took on May 11th, 2020.

  • Before: As per CoinMarketCap data, the price of Bitcoin one month before the halving took place was approximately $6,600.
  • During: On the date of the halving, Bitcoin was trading at $9,100. This means that in the month leading up to the halving, Bitcoin increased in value by 37%.
  • After: However, the upward trend did not stop there. At the close of 2020, Bitcoin was priced at over $29,000. At the time, this was an all-time high for Bitcoin. So, compared to the price of Bitcoin a month before the May 2020 halving, an increase of 340% was achieved.

Even more interesting is that this period was in the midst of the COVID-10 pandemic, where many traditional securities saw huge declines.

Bitcoin price chart

Moving into 2021, the upward trajectory picked up the pace further. The bull run ended in November 2021, when Bitcoin surpassed $68,000. This means buying Bitcoin a month before the previous halving event would have secured total gains of over 930%.

That said, we need to look at other Bitcoin halving events to ensure our analysis is credible.

2016 Bitcoin Halving

Next, let’s analyze the 2016 Bitcoin halving, which took place on July 9th.

  • Before: A month before the July 2016 Bitcoin halving, the digital asset was priced at $580.
  • During: On the date of the halving, Bitcoin was trading at $662. This means Bitcoin increased by 14% from the month prior to the halving event.
  • After: Just like in the previous Bitcoin halving, the upward trend continued throughout the year. At the close of 2016, Bitcoin was priced at $959. When compared to one month before the halving event, this represents gains of 65%.

That said, the Bitcoin halving bull run did not stop at the end of 2016. On the contrary, the upward trend continued for another year.

In December 2017, Bitcoin hit a then all-time high of $20,000. Therefore, when compared to one month before the halving event, the Bitcoin rally produced gains of over 3,300%.

2012 Bitcoin Halving

Before evaluating our findings, let’s look at the previous Bitcoin. halving. This occurred on November 28, 2012.

  • Before: A month before the November 2012 halving, Bitcoin was trading at $10.70.
  • During: When Bitcoin halved a month later, it was priced at $12.40. This represents gains of 21%.
  • After: By the end of 2012, Bitcoin was trading at $13.40. This converts to growth of 31% from one month prior to the halving event.

A prolonged bull run after the Bitcoin halving event once again took place. One year after the halving event in November 2013, Bitcoin was trading at $1,079. Compared to one month before the halving took place, that’s gains of over 10,000%.

Performance of Bitcoin Before, During, and After Halving Events

As established in the sections above, the previous Bitcoin halving events have produced similar results.

First and foremost, Bitcoin has historically produced steady gains in the month leading up to the halving date. In 2020, 2016, and 2012 this stood at 37%, 15%, and 21%, respectively.

However, the vast majority of the gains came in the year preceding the Bitcoin halving event.

For example, one year after the 2020 Bitcoin halving event, the digital asset was priced at $49,000. On the day of the halving event, Bitcoin was trading at $9,100. That’s growth of almost 440%. The peak, however, came in November 2021, when Bitcoin hit $68,000. This means that the bull run following the Bitcoin halving event lasted for 17 months. After that, the trajectory reversed, and Bitcoin began its extended bear market.

The previous halving in July 2016 followed suit. On the day of the halving, Bitcoin was priced at $662. A year later, Bitcoin was worth $2,600. That’s gains of just over 90%. The peak of the bull run occurred in December 2017, when Bitcoin hit $20,000. This means the bull run following the Bitcoin halving also lasted 17 months.

Finally, when Bitcoin halved in November 2012, it was priced at $12.40. The bull run to follow lasted until November 2013, when Bitcoin hit a then-all-time high of $1,237. This means that the proceeding bull run was shorter, lasting 12 months.

How to Trade the Bitcoin Halving Events

Now that we have established the performance of Bitcoin during and after the previous halving events, we can now assess how to trade the next one.

Put simply, all three halving events resulted in Bitcoin going on an extended bull run. The previous two lasted for 17 months. While the 2012 halving event yielded a bull run of 12 months. Crucially, in all three instances, Bitcoin hit new all-time highs.

While past performance does not guarantee future returns, this is solid information to trade-off.

What is the Next Bitcoin Halving Price Prediction?

It remains to be seen how Bitcoin will perform after the next halving event. That said, those buying Bitcoin a month before the 2020 halving would have seen an upside of 930%. Some investors believe the Bitcoin price after next halving could see new all-time highs.

Currently, Bitcoin is trading at $30,000. This is 55% below its former all-time high. If Bitcoin is to recover its previous peak of $68,000, this would yield an upside of 126%. However, as noted, previous bull runs netted higher all-time highs. As such, if history repeats itself, Bitcoin could grow by more than 126%.

In terms of how to trade the next Bitcoin halving, current prices offer an attractive entry price. That said, there is every chance that Bitcoin will decline before the halving event takes place. Equally, it could also rise.

As such, the most risk-averse strategy is to dollar-cost average. This removes the need to try and find the perfect entry point. Instead, buying similar amounts of Bitcoin every week or month will average the cost price up. Some investors will continue dollar-cost averaging Bitcoin after the halving event happens, considering the extended bull runs that have previously occurred.

It is important to choose a suitable exchange when following a dollar-cost averaging strategy. The chosen exchange should offer low fees, small minimum requirements, and hold licenses from reputable financial bodies.

Does Bitcoin Halving Impact BTC’s Value and the Wider Crypto Market?

We have established that after the previous three Bitcoin halvings, the price of BTC has appreciated. In fact, on all three occasions, Bitcoin has hit new all-time highs. Therefore, history would suggest that the Bitcoin halving event has an impact on its value.

In turn, as the world's largest and de-facto cryptocurrency, a bull run for Bitcoin often trickles down to the broader market. In many cases, altcoins actually outperform Bitcoin. This is because altcoins have a much smaller market capitalization than Bitcoin, so they have a lot more room for growth.

Let's look at an example.

  • We mentioned that in the previous Bitcoin halving, BTC was priced at $9,100.
  • 17 months later, Bitcoin peaked at just over $68,000 - netting gains of 930%.

However, now consider the case of Ethereum.

  • On the date of the Bitcoin halving, Ethereum was priced at just $187.
  • When the 17-month bull run came to an end, Ethereum was trading at $4,633
  • This means that while Bitcoin grew by 930%, Ethereum produced gains of over 2,300%.
  • Some altcoins performed even better.
  • As such, one of the best strategies to prepare for the next halving Bitcoin event is to build a diversified portfolio of cryptocurrencies.

Not sure which cryptocurrencies to invest in? Check out our guide on the best cryptocurrencies to buy for the next bull run.

Bitcoin ETF Token - Bitcoin-Related Token With Rocket APY And Market Driven Roadmap

Bitcoin ETF Token ($BTCETF) is a recently launched crypto presale that provides a powerful PoS APY above 5,500% as well as a roadmap that is tied to expected real-world events. 

The 5 milestones in its roadmap are native coin trade volume above $100M, Bitcoin ETF approval by the SEC, Bitcoin ETF live trading, Bitcoin ETF market cap breaching $1B, and the BTC price reaching $100K. 

Bitcoin ETF Token Homepage At each of these expected milestones, 5% of the overall token supply will be burned and the 5% burn tax on each transaction will be reduced by 1%. These milestones can happen in any order, though SEC approval has to take place before live trading. So of the 2.1 billion token supply, 25% (525 million) is being burned. This is an extremely large burn allocation that helps with token scarcity, driving up the price. 

There are 10 stages in this presale with price increases at each stage. In stage one, the price is $0.005, a figure that will rise to $0.0068 by the final stage. These are three powerful investment incentives - structured price increases, high APY, and aggressive token burning policies. None of these incentives are available with Bitcoin ETFs or with Bitcoin. 

It’s quite possible that Bitcoin ETF approval will help this token to increase by 10x or more, while Bitcoin and the ETFs enjoy more modest price increases.

This presale is positioning itself specifically for ETF approval, and could be a great coin to hold if this comes to pass, which many analysts are expecting. 

Regular updates relating to BTC ETF approval are provided in the campaign’s Twitter and Telegram accounts. 

The Bitcoin ETF Token Whitepaper should be read for further clarification as to what it offers. 

Hard Cap $4.956 Million
Total Tokens 2.1 Billion
Tokens available in presale 840 Million
Blockchain Ethereum Network
Token type ERC-20
Minimum Purchase NA
Purchase with USDT, ETH, BNB, MATIC, Card

The Verdict

Having covered everything there is to know about Bitcoin's next halving event, exciting times could lie ahead. After all, the previous three halving events have led to extended bull runs and new all-time highs.

That said, investors should do their own research and remember that past performance does not guarantee future returns.

For an alternative option that could deliver higher ROI if market conditions are appropriate, you might also want to consider Bitcoin ETF token, a utility driven crypto tied to real-world regulatory events.

Cryptoassets are highly volatile and unregulated in most countries. No consumer protection. Tax on profits may apply. Your capital is at risk.

References 

FAQs

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Kane Pepi

Kane Pepi is an accomplished financial and cryptocurrency writer who has an extensive portfolio of over 2,000 articles, guides, and market insights. With his expertise in specialized subjects such as asset valuation and analysis, portfolio management, and financial crime prevention, Kane has built a reputation for providing clear explanations of complex financial topics. He holds a Bachelor's Degree in Finance and a Master's Degree in Financial Crime, and is currently pursuing his Doctorate degree, which focuses on investigating the complexities of money laundering in the cryptocurrency and blockchain technology sectors. Kane's wealth of knowledge and experience in the field make…