What is the Bitcoin halving, and does it affect the price?

Every four years, the new bitcoin created per block is cut in half. What the halving is, when the last and next ones are, and what it does (and doesn't) mean for prices.

The Bitcoin halving is a scheduled event, built into Bitcoin's code, that cuts the reward for creating new bitcoin in half. It happens roughly every four years.

How new bitcoin is created

Bitcoin's transactions are processed by "miners": computers around the world competing to add the next block of transactions to the blockchain, roughly every 10 minutes. The winner earns a reward of newly created bitcoin. That reward is the only way new bitcoin comes into existence.

What the halving does

Every 210,000 blocks (about four years), that reward is cut in half:

• 2009: 50 bitcoin per block
• 2012: 25
• 2016: 12.5
• 2020: 6.25
• April 2024: 3.125

The next halving is expected around 2028. Because the reward keeps halving, the total supply will never exceed 21 million bitcoin. The last fraction is expected to be created around the year 2140.

Why people care

Halvings slow the flow of new bitcoin into the market. If demand stays the same while new supply shrinks, basic economics suggests upward pressure on price. In the past, big rallies have followed several halvings, which is why the event gets so much attention.

Why it's not a guarantee

• The past isn't a promise. Only a handful of halvings have ever happened, which is far too few to draw firm conclusions.
• It's predictable. Everyone knows the date years in advance, so markets may "price it in" early.
• Other forces now matter more. Today, ETF flows, interest rates and big investors can easily outweigh the change in miner supply. See how the Fed affects Bitcoin.

What it means for miners

Each halving cuts miners' income from new coins in half overnight. Miners with higher costs can be forced to sell more of their bitcoin, or shut down, which can add selling pressure around halvings.

The takeaway

The halving is a real, permanent change to Bitcoin's supply and a big part of its "digital scarcity" story. But it's one factor among many, not a reason on its own to buy.

New to all this? Start with our free 3-day crypto crash course.

General market information for education only, not financial advice. Crypto-assets are highly volatile; never risk money you can’t afford to lose.