What is Bitcoin Halving? Definition, History, and Impact on the Crypto Market

Jakarta, Pintu News – Bitcoin (BTC) has passed a milestone event known as a halving, the moment when rewards for miners are cut in half. This event occurred on April 19, 2024, reducing the block reward from 6.25 BTC to 3.125 BTC.

With the price of Bitcoin having reached new highs, many crypto market participants are predicting that this halving will affect supply, price, and investment strategies going forward. So, what does the halving mean for the cryptocurrency world and when will the next one happen?

What is Bitcoin Halving and How does it Work?

According to Coingecko, Bitcoin operates on a Proof-of-Work (PoW) mechanism, where miners compete to solve cryptographic puzzles to validate blocks of transactions.

Winners will be rewarded in the form of new Bitcoins that go straight into circulation. However, the amount of these new BTCs is not constant. Every 210,000 blocks-about once every four years-miners’ rewards are cut in half, a process known as halving.

This mechanism is embedded in Bitcoin’s code by its creator, Satoshi Nakamoto, and runs automatically without human intervention.

The first halving in 2012 reduced the reward from 50 BTC to 25 BTC, then to 12.5 BTC in 2016, 6.25 BTC in 2020, and now 3.125 BTC in 2024. This cycle will continue until the maximum amount of 21 million BTC is reached, making Bitcoin as scarce as digital gold.

Also read: 5 Largest Crypto Coin Rankings Right Now Based on Market Cap!

History of Bitcoin Halving and its Impact on Price

The first halving event on November 28, 2012 became a major test of Bitcoin’s supply design. Within a year, the price jumped more than 8,000%, attracting the attention of early investors. The second halving on July 9, 2016 reinforced the perception of Bitcoin as astore of value with a 263% price increase in the following 12 months.

By the third halving, May 11, 2020, BTC prices were up 561% a year later, fueled by a surge in retail investor interest and global media coverage.

Meanwhile, the fourth halving in April 2024 took place amid huge capital inflows from spot Bitcoin ETFs such as IBIT and FBTC, which recorded a first-day trading volume of IDR 74.7 trillion.

Pro-crypto policy support from the Donald Trump administration and legislation such as the GENIUS Act also gave a significant boost to market sentiment.

When is the Next Bitcoin Halving?

Each Bitcoin block is added approximately every 10 minutes, so a halving occurs approximately every four years. Based on the current block production rate, the fifth halving is expected to occur in April 2028, reducing the reward to 1.5625 BTC per block.

While the exact date may change due to fluctuations in network difficulties and mining activity, the Bitcoin protocol ensures this cycle remains consistent. This makes supply planning predictable, an important factor for investors and cryptocurrency industry players.

Read also: Ethereum Breaks $4,200, Here are 3 Layer-2 Ethereum Projects Worth Monitoring

Impact of Bitcoin Halving on BTC Supply

The main effect of halving is to slow down the influx of new Bitcoin supply into the market. With over 93% of the supply already in circulation, there is less and less BTC left to mine. Any cut in rewards reduces Bitcoin’s inflation rate and reinforces the concept of scarcity, which is often considered a long-term driver of value.

While there is no guarantee that prices will rise after the halving, historical patterns show a tendency for growth in the long run. This concept of scarcity often influences investor behavior, especially when demand remains high or increases.

Bitcoin Halving’s Impact on Miners

Miners are the most direct beneficiaries of the halving effect, as their income is reduced by 50% instantly. The ever-increasing complexity of cryptographic puzzles means they have to invest in more sophisticated equipment and infrastructure, resulting in increased operational costs.

This decrease in revenue may make small miners no longer profitable, potentially affecting the level of decentralization of the network. On the other hand, large miners with high efficiency can survive and even expand their market share.

Conclusion

Bitcoin halving is not just a technical moment, but an event that affects supply, price, miners, and overall market sentiment. Against the backdrop of institutional support and pro-crypto policies, the 2024 halving became one of the most exciting in Bitcoin’s history. As 2028 approaches, cryptocurrency market participants will continue to monitor how this scarcity affects Bitcoin’s value and role in the global financial world.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Coingecko. What Is Bitcoin Halving and Why Is It Important? Accessed August 10, 2025
• Featured Image: Generated by AI