The Bitcoin halving is a significant event for Bitcoin, as it will have a key impact on mining rewards, currency supply, and price.
Bitcoin issuance amount
The amount of Bitcoin issued is predetermined by a program. As explained in " What is Bitcoin mining? ", the majority of the rewards from mining are newly issued Bitcoins, and these rewards are issued each time a block is added to the Bitcoin blockchain (in other words, each time a transaction is mined and verified as "correct").
As of September 2024, 3.125 BTC is issued per block (allocated to the computer that first solves the calculation problem in mining). Immediately after the halving in April 2024, 19,687,500 BTC have been issued.
The last Bitcoin is expected to be issued around 2140, more than 100 years from now. When the last Bitcoin is issued, the total amount issued will be 20,999,999.9769 BTC (about 21 million BTC). (Click here for detailed data )
The amount of Bitcoin issued for each additional block is halved at the time called the "halving". Each time a halving occurs, the amount issued decreases. Below is a graph showing the years and months of past and future halvings and the amount issued at that time.
What is the Bitcoin Halving?
To reiterate, Bitcoin's halving is the process by which the amount of mining rewards received for newly mined Bitcoins is halved each time a new block is mined. This occurs every 210,000 blocks, or approximately every four years. This mechanism is a big difference from the US dollar and Japanese yen, where the supply of Bitcoin is predetermined and interest rates and the supply of money are determined by a small number of people.
Price increase phase following previous halvings
Bitcoin halvings have occurred three times in the past (as of July 2023), each time resulting in a significant price increase phase. These price increases are widely believed to be due to the halving reducing new Bitcoin supply, which reduces selling pressure.
First Halving (November 28, 2012)
Lowest price before halving: $2.0 (November 18, 2011)
Highest price after halving: $1,239.90 (December 5, 2013)
(Price data: Investing.com )
During this period, Bitcoin started to gain media attention. During this period, Bitcoin started to gain media attention.
Also, in early 2013, a financial crisis occurred in Cyprus in the Mediterranean Sea, triggered by a tax on bank deposits that was introduced in exchange for financial assistance to Cyprus by the Eurozone . It is said that interest in Bitcoin increased as the weakness of the traditional banking system became apparent.
Bitcoin prices began to rise in 2013, when the Cyprus financial crisis occurred, and by the end of that year they had exceeded $1,200.
Second Halving (July 9, 2016)
Lowest price before halving: $157.30 (14 January 2015)
Highest price after halving: $19,587.70 (December 16, 2017)
(Price data: Investing.com )
The price of Bitcoin, which exceeded $1,200 at the end of 2013, fell to one-sixth of that amount, $200, in 2015, but has been gradually increasing since 2015, leading to the second halving in July 2016. The price increase accelerated from December 2016, reaching a post-halving peak of over $19,000 in December 2017.
During this period, online fundraising (Initial Coin Offering (ICO)) by virtual currency projects other than Bitcoin became a kind of boom. As virtual currencies including Bitcoin became known to the general public, their prices accelerated.
3rd Halving (May 11, 2020)
Lowest price before halving: $3,117.00 (December 15, 2018)
Highest price after halving: $72,710.80 (April 8, 2024)
(Price data: Investing.com )
Bitcoin, which hit $19,000 in December 2017, fell to $3,200 in December 2018. It briefly exceeded $13,000 in June 2019, but fell again as the halving approached. COVID-19 (novel coronavirus) emerged in December 2019 and became a pandemic in 2020, causing economies around the world to suddenly slow, causing the price to fall again, to $5,000 in March 2020.
Subsequently, as a measure to combat the economic downturn caused by the COVID-19 pandemic, countries including Japan implemented monetary easing (making it easier to borrow money) and distributed subsidies. However, this money could also be said to be "central banks and governments lowering interest rates and handing out money," which led to concerns that it would cause future inflation (in other words, an abundance of money causing its value to decrease). As a result, the price of Bitcoin rose sharply, reaching nearly $70,000 in November 2021.
In this situation of "money surplus," some institutional investors (such as funds) and large companies (such as Tesla) increased their investments in Bitcoin and other virtual currencies.
4th Halving (April 2024)
Lowest price before halving: $15,504.2 (November 21, 2022)
Highest value after half-life: (?)
(Price data: Investing.com )
After reaching a price of nearly $70,000 in November 2021, the price began to fall in 2022 due to the Federal Reserve Board (FRB), the central bank of the United States, tightening monetary policy (raising interest rates to make it more difficult to borrow money). The price fell sharply due to a series of bad news, including the collapse of cryptocurrency projects (the sharp fall of TerraUSD and the collapse of LUNA (April 2022), the bankruptcy of Celsius Network (June 2022)), the bankruptcy of cryptocurrency hedge fund Three Arrows Capital (June 2022), and the bankruptcy of FTX Exchange, one of the largest cryptocurrency exchanges in the world at the time (November 2022), and fell below $16,000 in November 2022.
It is not entirely clear whether we will see a price rise phase as in the past after the fourth halving, which will occur around April 2024, but as the rewards for miners like us will be halved, the amount of Bitcoin sold on the market will certainly decrease, and we can expect prices to rise as they have in the past.
In mid-2023, the US central bank's policy of raising interest rates (making it harder to borrow money) is expected to take a breather, and in the second half of 2024, interest rates are expected to be lowered due to the worsening economy. In the past, when interest rates were lowered, the price of Bitcoin rose significantly, so this may trigger a price rise phase after the fourth halving.