Halving

What Is Block Halving?

Block halving refers to an event in certain blockchain networks where the block reward given to miners is reduced by half once a predetermined block height is reached. This mechanism is designed to control the issuance rate of new coins. The most widely discussed example of block halving is Bitcoin halving.

In Bitcoin, a block can be seen as a page in the ledger, with each page recording a batch of transactions roughly every 10 minutes. Those who provide computational power to bundle transactions are called miners. They use hardware and electricity to secure the network, and as a reward, the system grants them a “block reward” (comprising newly minted bitcoins and transaction fees). The halving event primarily affects the amount of new bitcoins generated per block.

How Does Block Halving Work?

The principle behind block halving is embedded within the protocol itself: when the blockchain reaches a specified block height, the reward multiplier automatically drops to 0.5 without any manual intervention or voting.

For Bitcoin, halving occurs every 210,000 blocks, which translates to roughly once every four years, based on the target of a 10-minute block interval. Historical Bitcoin halving events include: November 28, 2012 (reward dropped from 50 to 25 BTC), July 9, 2016 (from 25 to 12.5 BTC), May 11, 2020 (from 12.5 to 6.25 BTC), and April 20, 2024 (from 6.25 to 3.125 BTC). (Sources: Bitcoin protocol and blockchain explorer data)

How Does Block Halving Affect Supply?

Block halving directly slows the rate of new supply entering circulation, causing inflation to decrease stepwise and the total supply to approach the protocol’s maximum (21 million BTC for Bitcoin).

Taking the 2024 halving as an example: before halving, each block produced 6.25 BTC, so at an estimated rate of one block every 10 minutes (144 blocks per day), about 6.25 × 144 ≈ 900 new BTC were issued daily. After halving, each block yields 3.125 BTC, resulting in roughly 3.125 × 144 ≈ 450 new BTC per day. Annually, this translates to a drop from approximately 328,500 BTC to about 164,250 BTC (Source: Bitcoin protocol, post-April 2024 calculation). Lower new supply means less long-term “new coin selling pressure,” but short-term price movement is still more influenced by current holders and overall market liquidity.

How Does Block Halving Impact Miners and Hashrate?

Block halving reduces miners’ block reward income. Miners facing high electricity costs or using less efficient equipment may struggle to break even after a halving and may exit the market, causing temporary fluctuations in network hashrate and block production speed.

Miners’ revenue consists of both new coins and transaction fees. If transaction fees rise during the halving period, they can partially offset the reward cut, but this effect is unpredictable. In Bitcoin, mining difficulty is adjusted every 2,016 blocks (about two weeks) to maintain an average block interval of around 10 minutes by automatically responding to changes in total network hashrate. This mechanism typically stabilizes the network within weeks after a halving event.

What Is the Relationship Between Block Halving and Price?

There is no guaranteed causal relationship between block halving and price movement; halving only changes the rate of new supply, while prices are influenced by broader factors such as macro liquidity, market sentiment, regulatory developments, adoption rates, and derivatives positioning.

Historically, halvings have often coincided with increased attention and heightened volatility, but outcomes differ across cycles. A rational approach is to treat halving as a supply-side factor to be considered alongside demand-side data—such as on-chain activity, capital flows, and institutional participation—rather than using it alone as a basis for price predictions.

How Can You Track Halving-Related Assets on Gate?

On Gate, you can monitor assets affected by block halvings through watchlists, price alerts, and news feeds while maintaining sound risk management practices.

Step 1: Search for “BTC” on Gate, add it to your watchlist, and set up price and volatility alerts for timely updates around key events.

Step 2: Check candlestick charts and trading volumes on the market page, mark relevant event dates, and watch for unusual price swings. Also pay attention to risk warnings and official announcements from the platform.

Step 3: Use Gate’s news and research sections to stay informed about network upgrades, miner ecosystem changes, and fee trends—avoid making decisions solely based on social media rumors.

Step 4: If trading with futures or leverage, predefine your maximum loss limits and stop-loss levels. Manage your position sizes carefully to avoid risks that exceed your tolerance during volatile periods.

Which Projects Besides Bitcoin Have Halvings?

Beyond Bitcoin, other projects such as Litecoin also implement halving mechanisms but with different schedules and rules.

Litecoin halves every approximately 840,000 blocks; the most recent halving occurred in August 2023, reducing the block reward from 12.5 LTC to 6.25 LTC (Source: Litecoin protocol and blockchain explorer). Bitcoin Cash follows a similar halving cycle to Bitcoin. In contrast, Ethereum does not have “halvings”; instead, it controls supply through fee burning introduced in EIP-1559 and issuance parameters under Proof of Stake, constituting a different deflationary model.

What Are the Risks and Preparations for Block Halving?

Key risks include increased price volatility, changes in liquidity, fluctuations in transaction fees, and informational noise during major events. Preparation should focus on risk management and security.

Step 1: Time verification. Confirm the expected block height and estimated event time using reliable sources to avoid acting prematurely or too late due to incorrect dates.

Step 2: Fund planning. Do not expose funds needed for short-term commitments to potential event-driven volatility. Set up stop-loss orders and position limits; it is better to miss uncertain market swings than suffer losses beyond your risk capacity.

Step 3: Tool utilization. Enable price alerts and execute trades in batches to minimize emotional decisions; use leverage or high-risk strategies with caution.

Step 4: Account security. Activate two-factor authentication, be wary of phishing links and fake announcements, and follow platform safety guidelines when managing funds.

Key Takeaways on Block Halving

Block halving is a protocol-level supply control mechanism that reduces rewards based on block height. It gradually lowers new issuance rates over time while impacting miner revenues and network dynamics. However, halving does not directly determine price trends—prices remain subject to demand and macroeconomic conditions. By understanding blocks, rewards, difficulty adjustments, and supply data—and combining these with diligent monitoring and risk controls on Gate—you can participate more prudently throughout each halving cycle.

FAQ

Will Miners’ Profits Drop Sharply After Halving?

Halving does reduce miners’ block rewards by half; however, total profits do not always decrease proportionally. Historically, if the coin price increases substantially after a halving event, miners’ aggregate income may even rise. However, mining operations with high costs may shut down due to shrinking margins, which can lower network hashrate and improve block production efficiency for remaining miners.

Should Regular Investors Buy Before or After Halving Events?

This question involves market expectations and individual risk tolerance. There is often anticipation of price increases before a halving (“priced in”), while corrections (“sell-the-news”) may follow afterwards. New investors are advised not to attempt precise market timing but instead use systematic investment plans—accumulating positions in batches according to their strategy—and set up price alerts on regulated platforms like Gate for long-term monitoring rather than short-term speculation.

Can You Really Predict Coin Prices Based on Halving Cycles?

Bitcoin’s halving cycle occurs roughly every four years and shows some correlation with historical bull-bear cycles—but halvings themselves do not directly predict price movements. Prices are shaped by numerous factors including macroeconomics, policy developments, and market sentiment. Relying solely on halving cycles for forecasts is backward-looking (“trading history for the future”) and risky. A more scientific approach is to treat halvings as fundamental data points considered alongside other indicators for a holistic analysis.

What Practical Impact Does Halving Have on Exchanges and Users?

Halvings mainly affect miner incentives rather than having a direct impact on exchange users. However, they often coincide with increased market volatility—leading to higher trading volumes and larger price swings—making it important for users on platforms like Gate to use stop-loss tools and monitor price changes closely. During halving periods, media attention surges; beware of misinformation or emotionally driven trading decisions.

Why Did Bitcoin Adopt Halving Instead of Fixed Supply Issuance?

The halving mechanism is central to Bitcoin’s inflation control strategy. Each halving slows down new supply issuance until the maximum supply of 21 million BTC is reached around the year 2140. This approach simulates the extraction process of scarce resources—gradually increasing scarcity helps preserve long-term value expectations. In contrast with unlimited fiat money printing, this is one of the main reasons why Bitcoin attracts investors seeking long-term store-of-value assets.