Editor’s Note (Dec. 10, 2025): Added internal link to new guide on post-mining economics.
Bitcoin halving is a pre-programmed event in the Bitcoin network that reduces the reward miners receive for adding new blocks to the blockchain by half. This mechanism, embedded in Bitcoin’s code by its creator Satoshi Nakamoto, occurs approximately every four years or after 210,000 blocks are mined.
Its primary purpose is to control the supply of new bitcoins entering circulation, making Bitcoin a deflationary asset with a capped supply of 21 million coins. Understanding halving is key to grasping Bitcoin’s economic model and its influence on the broader cryptocurrency market.
This article explores what Bitcoin halving is, its history, economic effects, and how it compares to other crypto mechanisms like coin burns.
Mechanics of Bitcoin Halving
Bitcoin’s blockchain is a public ledger where miners use powerful computers to solve cryptographic puzzles, verify transactions, and earn new bitcoins as a reward. Halving cuts this reward in half, reducing the rate of new bitcoins entering circulation.
When Bitcoin launched in 2009, miners received 50 BTC per block. The first halving in 2012 dropped it to 25 BTC, the 2016 halving to 12.5 BTC, and the 2020 halving to 6.25 BTC.
This event is automatic, triggered when the blockchain reaches a multiple of 210,000 blocks. It is coded to happen predictably, unaffected by market conditions or human decisions.
By slowing the supply of new coins, halving mimics the scarcity of resources like gold, aiming to preserve Bitcoin’s value over time. The halving process will continue until around 2140, when the block reward becomes negligible and no new bitcoins will be created, reaching the 21 million cap defined in the original protocol.
History of Bitcoin Halvings
Since Bitcoin’s launch in 2009, the network has completed four halving events:
| Date | Block Height | Block Reward | Approx. Price at Halving1 |
|---|---|---|---|
| Nov. 28, 2012 | 210,000 | 50 to 25 BTC | $12 |
| July 9, 2016 | 420,000 | 25 to 12.5 BTC | $650 |
| May 11, 2020 | 630,000 | 12.5 to 6.25 BTC | $8,700 |
| April 20, 2024 | 840,000 | 6.25 to 3.125 BTC | $64,000 |
The next halving is expected around 2028 at block 1,050,000, reducing the reward to 1.5625 BTC.
Each halving has coincided with significant price movements, though correlation is not causation. Media attention, institutional adoption, and macroeconomic factors also drive market cycles. Past performance does not guarantee future results.
Over 19.8 million BTC are in circulation, leaving roughly 1.2 million to be mined before reaching the 21 million cap encoded in the original whitepaper.
Economic Effects of Bitcoin Halving
Halving ripples through the crypto ecosystem and beyond. For miners, the reduced reward means less income, which can be challenging if electricity or hardware costs are high. Some may stop mining, potentially lowering the network’s computing power, known as the hash rate.
Bitcoin’s design counters this with a difficulty adjustment every 2,016 blocks (about two weeks), ensuring blocks are added consistently every 10 minutes.
On a broader scale, halving tightens Bitcoin’s supply. If demand holds steady or grows, this scarcity can push prices up, affecting investors, businesses, and everyday users. Higher prices might encourage more spending or adoption, boosting crypto’s role in commerce. But if miners sell their Bitcoin to cover costs, prices could dip temporarily. These shifts influence everything from crypto exchanges to companies holding Bitcoin on their balance sheets.
Halving also strengthens Bitcoin’s image as a hedge against inflation. Unlike fiat currencies that governments can print without limit, Bitcoin’s controlled supply appeals to those wary of devaluation. This narrative draws in institutional players like hedge funds, linking crypto more closely to mainstream finance.
Yet price swings after halvings can deter cautious investors, showing the event’s mixed economic impact.
Beyond economics, halvings are a cultural touchstone for the crypto community. They mark milestones in Bitcoin’s journey, celebrated with memes, livestreams, and online debates. Each event reinforces the ethos of decentralization and resistance to centralized control, core to Bitcoin’s identity.
Impact of Bitcoin Halving on Altcoins
Bitcoin’s market dominance means its halvings often influence altcoins like Ethereum, Solana, or Polkadot. A Bitcoin price surge post-halving can spark a market-wide rally, as traders move profits into altcoins. For example, after the 2020 halving, Ethereum climbed from $200 to over $4,000 by 2021, riding Bitcoin’s momentum.
Not every altcoin benefits, though. Those with strong technology or community momentum tend to gain more, while less popular ones may stall. Halvings can also pull attention and capital toward Bitcoin, briefly reducing altcoin investment. On the flip side, if Bitcoin mining becomes less profitable, some miners might switch to altcoins, boosting their network activity.
The impact of Bitcoin halving on altcoins is a blend of spillover effects and market competition, shaped by Bitcoin’s gravitational pull on the broader crypto market.
Bitcoin Halving vs. Crypto Burn
Bitcoin halving controls supply by slowing new coin creation, but a crypto burn takes a different approach by destroying existing coins. In a burn, coins are sent to a wallet no one can access, permanently reducing the supply. Binance Coin (BNB), for instance, burns coins quarterly to increase scarcity. In Q2 2021, Binance burned approximately 1.3 million BNB, valued at around $390 million at the time.
Halving is a fixed, predictable event in Bitcoin’s code, happening every four years. Burns depend on a project’s rules or team decisions, making them less consistent. Halving only affects new coins, while burns shrink the existing supply, often causing quicker price reactions. Both aim to make coins scarcer, but halving’s gradual effect contrasts with burns’ more immediate impact.
The incentives also differ. Halving challenges miners by cutting their rewards, which could favor larger mining operations if smaller ones drop out. Burns do not impact miners directly but can reward holders by raising the value of remaining coins. Some cryptocurrencies, like stablecoins, use burns to adjust supply for price stability, unlike Bitcoin’s deflationary design.
Role of Market Sentiment
Halving events spark excitement, as traders bet on price increases based on past patterns. This anticipation often drives pre-halving price climbs.
After a halving, prices can be unpredictable. While long-term gains have been common historically, short-term drops occur if the market overhyped the event. This sentiment also affects related sectors, like crypto exchanges or mining companies, which often see trading volume spikes.
As Bitcoin approaches its 21 million coin limit, halvings will continue shaping its path. By 2140, when the final Bitcoin is mined, miners will depend entirely on transaction fees. This shift raises questions about whether fees will be sufficient to keep miners engaged and the network secure. Rising Bitcoin prices or higher transaction volumes could help, but it remains an open challenge.
Update History
- Dec. 10, 2025: Added internal link to new guide on post BTC mining economics.
- Dec. 5, 2025: Article reviewed and updated for accuracy. Corrected data related to BNB token burns, added primary source citations, and consolidated the halving history into a single referenced table. – Zoran Spirkovski, Editor-in-Chief
- April 18, 2025: Original publication.
