Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Bitcoin halving countdown: When is the next Bitcoin halving?
What is the Bitcoin halving?
The Bitcoin halving is when its block rewards are cut in half. When this happens, new Bitcoin is only created half as fast as before. This makes it scarcer and theoretically more valuable.
This is a regular occurrence, which happens on a schedule that’s built into Bitcoin’s programming. It happens every 210,000 blocks. The first was in 2012, the second in 2016 and the third is expected to occur around May 2020, when the Bitcoin network reaches block number 630,000.
|The first halving||The second halving||The third halving|
|28 November 2012||9 July 2016||May 2020 (estimated)|
|50 BTC to 25 BTC||25 BTC to 12.5 BTC||12.5 BTC to 6.25 BTC|
How does the Bitcoin halving work?
Each halving sharply reduces Bitcoin’s inflation rate. This halving process is what gives Bitcoin its distinctive supply curve.
It works by simply reducing the amount of new Bitcoin that miners earn from finding a block on the Bitcoin blockchain, with the overall effect of reducing Bitcoin’s inflation rate.
Why is the halving important?
The halving is important for Bitcoin-watchers, because it may affect Bitcoin prices.
It’s believed to affect prices because it reduces Bitcoin’s inflation rate, which makes it more scarce and theoretically more valuable. Bitcoin’s annual inflation rate is currently around 4%, but after the next halving it will drop to around 2%.
Why is there a Bitcoin halving?
Bitcoin was designed to become increasingly scarce over time, specifically for the purpose of retaining monetary value. This was by design, because the functionality of the Bitcoin network depends on the coin retaining its value.
The regular halvings are designed to support this, by consistently reducing the supply of Bitcoin.
Will Bitcoin prices rise because of the halving?
It’s not possible to say with certainty what Bitcoin prices will do in the future, but if you subscribe to the theory that Bitcoin’s value is based on supply and demand, then it stands to reason that limiting the supply would correspond with a price rise.
Historically, Bitcoin prices have enjoyed brief rises prior to the halving from people trading on the anticipation, then longer, larger rises afterwards, as the additional scarcity does its part.
The first halving: 28 November 2012
The first Bitcoin halving was in November 2012 and Bitcoin prices steadily rallied in the lead-up. BTC prices were less than $4 at the start of the year and hit $13 by the end.
To date, that was the last time anyone could buy Bitcoin for less than $13.
Sentiment ran high through November as the first ever Bitcoin halving approached and prices steadily increased throughout November in anticipation of the first halving. Bitcoin enthusiasts threw “halving parties” and people watched to see what it would do to the prices.
The impact was substantial and the halving clearly had a major impact on how people perceived the value of a Bitcoin.
The second halving: 9 July 2016
The second halving, on 9 July 2016, was also preceded by high volumes and enthusiastic trading. The market impact of the event is clearly visible.
That price slump after the second halving was people’s last chance (to date) to buy Bitcoin for less than $600.
This time anticipation peaked a month before the event, resulting in a sell-off and then an eventual run-up towards the end of the year.
In contrast to the parties and enthusiasm of the first halving, market-watchers were more practical and jaded this time around. The general consensus seemed to be that Bitcoin had peaked at $750 and that anyone hoping for major results from the second halving would be disappointed.
But six months later Bitcoin was nearing $1,000.
The third halving: 20 May 2020
May 2019 was a good month for Bitcoin prices. It started at around $5,000 and finished at $8,500. June replicated the feat, taking Bitcoin up to $14,000 before it pulled back.
It’s not possible to say whether this is pent-up anticipation for the next halving, but it’s clear that each of Bitcoin’s halvings has resulted in it settling into new price tiers. Each Bitcoin halving to date has had a significant impact on Bitcoin and a lot of people are expecting the next one to do the same.
Looking to buy or sell Bitcoin?
More guides on Finder
Finder’s 2021 Bitcoin Predictions Report
We asked 47 experts for their cryptocurrency price predictions and took a deep dive into the Bitcoin price rally.
What are bonds and how do you buy them?
You could earn more with a government bond than with a savings account without significantly increasing your risk. Find out what bonds are and how they work here.
Bitcoin futures trading
Find out what exactly Bitcoin futures trading is, where to get started and how to pick the right trading site.
Bitcoin vs gold: What should you know before buying?
How does Bitcoin compare to gold? Here we compare scarcity, practical applications and the culture of value that surrounds each.
Grin vs Beam: How do they compare?
We compare Grin and Beam side by side to see what makes them tick, how they’re the same and how they’re different.
Compare bitcoin alternatives: 10 top competitors
If you’re looking for bitcoin alternatives, check out this beginner’s guide to 10 leading cryptocurrencies like bitcoin.
Bitcoin vs EOS: A feature by feature breakdown
How do EOS and bitcoin compare to one another? Find out in this guide to the similarities and differences of these two popular cryptos.
Bitcoin vs Monero: Compare to discover differences that matter
We compare bitcoin (BTC) and Monero (XMR) to examine their key features, similarities and differences.
A simple step-by-step guide to mining Bitcoin (BTC)
If you want to mine Bitcoin for profit, find out all about the mining process and how to get started in this handy guide.
Bitcoin vs Litecoin: How are BTC and LTC different?
What’s the difference between bitcoin (BTC) and Litecoin (LTC)? Find out in this comprehensive guide.
Ask an Expert
You must be logged in to post a comment.