Bitcoin Halving is an inbuilt feature of the Bitcoin protocol that reduces the amount Bitcoin miners earn for mining a block by 50%. This feature aims to maintain Bitcoin’s scarcity and protect the digital asset from inflation, which would be catastrophic for its value.
The Bitcoin halving event is much anticipated in crypto because it aligns with crypto enthusiasts’ collective hope for Bitcoin’s long-term value. The halving occurs every four years or after 210,000 Blocks are mined.
Bitcoin’s total supply is capped at 21 million tokens, and the asset has already witnessed five halving events, reducing mining rewards from 50 BTC to 3.125 BTC. Bitcoin founder Satoshi Nakamoto created the concept of halving to create scarcity for his digital asset, increasing their value like other valuable assets.
Bitcoin miners today earn 3.125 BTC per block. Dwindling profits and the high cost of electricity are making the venture less attractive, indirectly increasing Bitcoin’s scarcity.
However, large-scale miners like Marathon Digital are showing mixed profitability. The firm’s Q4 2024 report showed Marathon reported a net income of $528.3 million, with earnings per share (EPS) of $1.24, surpassing expectations of a $0.32 loss.
Quarterly revenue reached $214.4 million, up 37% year-over-year, beating estimates by 12.25%. Full-year 2024 revenue was $656.4 million, a 69% increase from 2023, with adjusted EBITDA at $794.4 million, indicating strong operational performance.
The Different Halvings
Since its launch in 2009, the Bitcoin project has experienced five halving events. Between 2009 and 2024, these reduced mining profits from 50 BTC to 3.125 BTC.
The network triggers the event every four years or after miners add 210,000 blocks to the blockchain. The Five Halvings are as follows:
- 2009 (Bitcoin’s launch): 50 BTC per block
- 2012: Reduced to 25 BTC
- 2016: Reduced to 12.5 BTC
- 2020: Reduced to 6.25 BTC
- April 19–20, 2024: Reduced to 3.125 BTC
Shrinking mining rewards mean fewer miners and less Bitcoin, adding to the value of the primary crypto asset. At the time of the report, Bitcoin had a circulating supply of 19.8 million tokens. However, its protocol caps at 21 million tokens, leaving the Project with only 1.2 million tokens to be mined.
When is the Next Bitcoin Halving?
The next Bitcoin halving event is slated for 2028. The reward for mining a block will drop to 1.5625 BTC, which is $133,000 at today’s BTC price.
The Last Bitcoin Halving Event occurred in April 2024, slashing mining rewards from 6.25 BTC to 3.135 BTC. Last year’s halving event was uneventful, with no significant price spike on the day.
An analyst noted that the crypto community may have already priced in their high anticipation of the halving event. Macroeconomic factors like U.S. inflation concerns (3.5–3.8% CPI) also tempered expectations for immediate gains.
Conclusion
The Bitcoin halving event is an essential milestone in the lifecycle of the Bitcoin project. Reducing mining rewards for miners means fewer miners are in the market, adding to the scarcity of the primary crypto asset. Bitcoin, which exchanged hands for $85,674, is the largest digital asset in the trillion-dollar crypto industry. The token paved the way for other assets and is the crypto market’s dominant force.
The next halving event will take place in 2028, and it will reduce Bitcoin mining rewards to 1.5626 BTC. Each halving reduces the rate of new Bitcoin issuance, stretching the remaining supply over decades.
