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What’s Bitcoin Halving?

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Bitcoin halving, also known as “halvening,” is an event that occurs approximately every four years when the mining rewards for each new block of Bitcoin transactions are cut in half. This means that the amount of new Bitcoin being created is reduced, which in turn reduces the rate at which new Bitcoin enters circulation. The purpose of halving is to slow down the rate of new Bitcoin creation, ensuring that the maximum supply of 21 million Bitcoins is not exceeded too quickly.

The first halving occurred in 2012 when the block reward was reduced from 50 BTC to 25 BTC. The second halving occurred in 2016, reducing the block reward to 12.5 BTC, and the third halving took place in May 2020, reducing the block reward to 6.25 BTC. The next halving is expected to occur in 2024.

Bitcoin halving events are closely watched by investors and traders, as they have historically been associated with significant price increases. The reduction in supply due to halving can lead to increased demand for Bitcoin, which can drive up its price.

When Did the Bitcoin Halvings Happen?

Historically, Bitcoin halvings have been associated with significant price surges. The first halving took place on November 28, 2012, and led to an increase in Bitcoin’s price from $12 to $1,207 by November 28, 2013. The second halving occurred on July 9, 2016, when Bitcoin’s price was $647. By December 17, 2017, the price had skyrocketed to $18,972, before falling to $3,716 on December 17, 2018. This was still a price about 575% higher than the pre-halving price.

The most recent halving happened on May 11, 2020, when Bitcoin’s price was $8,821. By April 14, 2021, the price had surged to $63,233, which was an impressive 617% increase from its pre-halving price. A month later, on May 11, 2021, the price was $49,504, indicating a 461% increase, which seems more consistent with the behavior of the 2016 halving.

The next is expected to occur in early May 2024.