Every 210,000 blocks — approximately every four years — Bitcoin’s block reward is cut in half. This event, called the “halving,” is the most predictable and arguably most important event in crypto markets. There have been four halvings: 2012 (50→25 BTC), 2016 (25→12.5), 2020 (12.5→6.25), and April 2024 (6.25→3.125). Each one reduced the rate of new bitcoin creation, tightening supply while demand grew.
The historical pattern is striking. After each halving, bitcoin entered a major bull market within 12-18 months: the 2012 halving preceded the 2013 rally to $1,100; the 2016 halving preceded the 2017 rally to $19,000; the 2020 halving preceded the 2021 rally to $69,000. Whether this pattern reflects genuine supply shock effects or self-fulfilling prophecy (everyone expects the rally, so they buy, causing the rally) is debated endlessly.
For miners, halvings are existential events. Revenue per hash drops 50% overnight while costs remain constant. The 2024 halving was particularly brutal because it coincided with already-compressed margins from high difficulty and moderate bitcoin prices. Miners with electricity costs above $0.06/kWh — roughly the global average — became unprofitable. The result was predictable: hash rate temporarily dropped as unprofitable miners shut down, difficulty adjusted downward, and surviving miners became more profitable. It’s Bitcoin’s built-in survival-of-the-fittest mechanism.
The next halving is expected around 2028, reducing the block reward to 1.5625 BTC. By then, transaction fees will need to constitute a larger share of miner revenue for the network to maintain its security budget. Bitcoin’s long-term security model — whether fees alone can sustain mining after block rewards become negligible — is one of the most important open questions in cryptocurrency. The halvings are a countdown clock to answering that question.
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