Bitcoin Halving

Bitcoin halving is an event that occurs approximately every four years, reducing the reward miners receive for validating transactions by 50%. Halvings are built into Bitcoin’s protocol to control its supply and occur every 210,000 blocks (roughly four years). The purpose of halving is to gradually reduce the rate at which new Bitcoins are created, mimicking the scarcity of gold and ensuring that the total supply of Bitcoin does not exceed 21 million coins. After a halving event, miners receive fewer Bitcoin rewards, which can lead to reduced profits for miners and potentially decreased mining activity. However, historically, Bitcoin halvings have been followed by significant price increases, as the reduced supply, combined with steady demand, tends to drive prices higher. The most recent halving occurred in May 2020, reducing the block reward from 12.5 BTC to 6.25 BTC. Bitcoin’s next halving is expected in 2024, and market participants closely monitor these events for potential price movements.