The Bitcoin Halving

Roughly every four years — every 210,000 blocks to be precise — the amount of new Bitcoin created per block is cut in half. This event is called the halving.

When Bitcoin launched in 2009, miners received 50 Bitcoin for every block they found. In 2012, the first halving reduced that to 25. In 2016, to 12.5. In 2020, to 6.25. In 2024, to 3.125.

This continues until roughly 2140, when the last fraction of a Bitcoin is mined and the supply becomes permanently fixed at 21 million.

The halving serves a specific purpose: it controls the rate at which new Bitcoin enters circulation, making it predictably scarce in a way that no other asset or currency has ever been. Unlike gold, where mining rates respond to price incentives, Bitcoin’s supply schedule is fixed in code regardless of price.

Historically, the halving has been followed by significant price appreciation — though with considerable lag and variation. The 2012 halving preceded the 2013 bull run. The 2016 halving preceded the 2017 run. The 2020 halving preceded the 2021 peak at $69,000.

The mechanism behind this pattern makes intuitive sense. If demand holds constant and supply growth is cut in half, the price should adjust upward — assuming the miners who produce new coins need to sell at current prices to cover costs.

None of this guarantees future performance. The halving is a supply event. What happens to demand is a separate question.

But it is the most predictable supply schedule of any monetary asset in history.

Tomorrow: the 2024 halving — what happened before and after.

— The Daily Bit