The Halving of Bitcoin: What You Need to Know

The Bitcoin halving is one of the most significant and anticipated events in the cryptocurrency ecosystem. This programmed phenomenon has a deep impact on both the circulating supply of Bitcoin and the dynamics of the market.

What is Bitcoin Halving?

The halving is a mechanism integrated into the Bitcoin protocol that halves the reward miners receive for validating blocks on the blockchain. This event occurs approximately every four years, or more specifically, every 210,000 mined blocks.

When Bitcoin was launched in 2009, the initial block reward was 50 BTC. Following the successive halvings, this reward has been decreasing:

• 2012: First halving - The reward decreased from 50 to 25 BTC
• 2016: Second halving - The reward was reduced to 12.5 BTC
• 2020: Third halving - The reward dropped to 6.25 BTC
• 2024 (April): Fourth halving - The current reward is 3.125 BTC

Impact on the Market and the Economy of Bitcoin

The halving has several important implications for the economy of Bitcoin:

Inflation Reduction: By decreasing the rate of new bitcoin issuance, the halving reduces the inflation of the BTC supply, strengthening its programmed scarcity characteristic.

Supply Pressure: With fewer new bitcoins entering the market while demand remains steady or increases, a natural pressure on the supply is created that has historically influenced mid- to long-term valuation.

Effect on miners: The reduction of rewards forces miners to optimize their operations, seek greater energy efficiency, or compensate for the lower issuance with an increase in transaction fees.

Historical Data and Post-Halving Performance

Although each halving has been followed by significant bullish movements, it is important to analyze these events with perspective:

• After the 2012 halving, the price of Bitcoin was approximately $12 and experienced substantial growth in the following months.
• During the 2016 halving, Bitcoin was trading around $660, followed by a notable appreciation.
• With the 2020 halving, the price was around $8,600 and six months later it reached $15,700.
• The recent halving in April 2024 occurred when Bitcoin was trading near $63,000.

The Next Halving Date

The next Bitcoin halving is scheduled for March 2028. In this event, the block reward will be reduced to 1.5625 BTC, continuing the pattern of progressive decrease.

It is important to understand that the exact date is an estimate based on the current block mining rate, so it may vary slightly as we approach the event.

Long-Term Perspective

The halving design ensures that the total supply of Bitcoin will never exceed 21 million coins, with the last bitcoin estimated to be mined around the year 2140. This deflationary economic model contrasts with traditional fiat currencies and represents one of the fundamental pillars of Bitcoin's value proposition as a digital store of value.

As we approach the fifth halving in 2028, both investors and market participants will be watching how this event will influence market dynamics, considering that the impact of each halving could be progressively less pronounced due to the greater maturity and capitalization of the market.