Explanation
Issuance of new bitcoin therefore steps down towards zero. Whether that drives the price is an assumption often repeated but based on very few observations.
The mechanism
Every 210,000 blocks — roughly four years — the reward miners receive per block halves. From 50 bitcoin in 2009 it went to 25, 12.5, 6.25 and, since April 2024, 3.125. New issuance therefore falls step by step until the last bitcoin is mined around 2140 and the 21 million cap is reached.
What it historically did
After each halving a strong rally followed within twelve to eighteen months, followed by a deep correction. Three observations are statistically not a law, however, and each cycle happened at a different interest-rate level and with a different type of buyer. Since 2024 those are mainly ETF flows rather than retail investors.
Economically the effect has also shrunk: new issuance is by now so small relative to daily trading volume that the halving mainly affects miner profitability, and only indirectly the price.
Key takeaways
- Roughly every four years, fixed in code.
- Hits miners directly, price indirectly.
- Three cycles are not a law.
Frequently asked questions
+When is the next halving?
Expected around 2028, depending on how fast blocks are found. The exact date is only known shortly beforehand.