What is the Bitcoin halving and why does it matter?
Bitcoin is created as a reward for miners, who use computers to check and record transactions. About every four years, that reward is cut in half. This event is called the halving.
How it works
- The halving happens after every 210,000 blocks, which takes roughly four years.
- The reward started at 50 Bitcoin per block in 2009.
- It was cut to 25, then 12.5, then 6.25, and in April 2024 to 3.125.
- The next halving is expected around 2028.
Why it exists
Bitcoin has a fixed limit of 21 million coins. The halving slows the creation of new coins, so the supply grows more slowly over time. By design, the last coins will be mined around the year 2140.
Does the halving make the price go up?
Many people expect that less new supply means a higher price, and prices have risen after past halvings. But the price also depends on demand, interest rates, ETF flows and many other things. The past is not a promise of the future.
What to remember
The halving happens on a fixed schedule that everyone knows in advance, so it is not a surprise, and the market may already be pricing it in.
This article is for information and is not investment advice.