KoinlyticsEvery 210,000 blocks, roughly every four years, the reward miners get for finding a block is cut in half. This is the halving. It is written into the Bitcoin code and it is the single biggest reason Bitcoin's supply schedule is knowable years in advance.
The schedule
The first block reward in 2009 was 50 BTC. In 2012 it dropped to 25. In 2016 to 12.5. In 2020 to 6.25. In April 2024 to 3.125. The next halving is around March 2028 and takes the reward to 1.5625 BTC. The last new bitcoin will be mined around 2140.
Why cut in half
The schedule is a geometric series. Total supply is capped at 21 million because that is what the series sums to. Any other curve either issues too many coins too fast or takes forever to bootstrap. Halving matches issuance to what a young network can absorb without inflating the price to zero.
What happens to miners
Overnight, mining revenue from block subsidy is cut in half. Fees from transactions still flow, but historically they have been small relative to the subsidy. The result is that the least efficient miners turn off their machines. Hashrate drops for a few weeks, then difficulty adjusts down, and the remaining miners become profitable again.
The price cycle
Halvings do not directly move the price. What moves is the flow of new coins. Before April 2024, miners were selling roughly 900 BTC per day into the market. After April 2024, that dropped to 450. If demand does not fall in half at the same time, the price adjusts upward to clear the market. Every prior halving has been followed by a bull cycle. Every prior bull cycle has also been followed by a brutal drawdown.
What to actually watch
- Hashrate. If it recovers within 60 days of a halving, miner capitulation is over.
- Fees as share of block reward. Long term, this is what pays miners once the subsidy shrinks to zero.
- Difficulty adjustment. Happens every 2016 blocks. Big drops after halvings are normal.