Bitcoin halving | Everything you need to know

It will not be long now, the bitcoin block halving or also called the bitcoin block halving. This means that the speed at which new bitcoins can be generated will decrease. The reason it is important is because less is coming to the market, which means that if demand rises or stays the same, the price will rise faster.

There have been two previous halves in the past, this was in 2012 and 2016. Both times it has shown that it is an important moment for the bitcoin price . The price has risen significantly both times around this event. In total, there will be only 32 halves, spread over decades. When this is finally ready, no more new bitcoins can be mined, so that the total supply can never exceed 21 million bitcoins. This means that there will be a limited number of bitcoins in circulation, which in turn will ensure that the bitcoin value will have more value than if there is unlimited mining.

Bitcoin halving moments

Halving Expected date Block height Block Reward (BTC)
0 AFTER 0 50
1 11/28/2012 210,000 25
2 07/09/2016 420,000 12.5
3 14/05/2020 630,000 6.25
4 2024 840,000 3.125
5 2028 1,050,000 1.5625

What is Bitcoin Halving?

The bitcoin halving is an event that halves the hashrate with which new bitcoins are created. This happens every 4 years. The supply, also known as the supply of bitcoins, is limited. No more than 21 million bitcoins are mined. After this number has been reached, no more bitcoins can be mined. This is what makes bitcoin so interesting, the maximum cap is 21 million. And the supply will decrease every four years. Because of this, many describe it as digital gold, because the supply is and remains scarce.

At the moment there are approximately 18 million bitcoins in circulation, which is about 85% of the total supply that will ever come. The next three million will be released approximately over the next 10 years, with fewer coming to the market every four years. Which means if the growth to bitcoin increases, the price will rise sharply as the supply becomes scarcer. Many therefore see bitcoin as an inflation against the future. The reason why the supply is getting scarcer is the protocol that is encoded in bitcoin, every 210,000 blocks there is a ‘bitcoin halving’ which is called bitcoin halving. This means that after the halving the process for producing new bitcoins becomes more difficult.

When is the next bitcoin halving?

The next bitcoin halving is on May 14 at the moment, this can sometimes differ by a few days, so that it could be a maximum of May 18. The date is never 100% because it can always speed up the process or be delayed. A so-called ‘block’ is created every 10 minutes. The last bitcoin halving will be in the year 2140, which would be the 21st million bitcoin. When that happens, miners will no longer receive block rewards. The next bitcoin halving after 2020 is 2024, in four years time.

Will the bitcoin price change based on the halving?

Historically, the price has always gone up around the halving. But the ultimate indicator that leads to a price increase is simply the supply and demand. It certainly does not offer a guarantee, although history shows that this always happens. The graph below shows the bitcoin halving history well.Bitcoin halving

The bitcoin halving is another moment when the supply of BTC in the market is shrinking, meaning it is getting scarcer. If the supply continues, it means the price will go up. History shows that the price of bitcoin is always significantly higher six months after the halving. So it went during the halving on 2016 which was on June 9 from $ 576 to $ 650 in one day. Which is a growth of more than 10%. And a month later it was even above $ 2500.

If history repeats itself, 2020 will again be a very positive year for bitcoin. Bitcoin is getting more and more popular and the supply is getting scarcer, more and more who want to own bitcoin will want to buy it for the long term which means the price will rise.

Leave a Comment