What is the Bitcoin halving?

The short answer

The Bitcoin halving is a scheduled event, written into Bitcoin's code, that cuts the number of new bitcoins created in each block by half. It happens every 210,000 blocks, which works out to roughly every four years. Nobody votes on it and no company decides it. Every node on the network enforces the same rule, so it happens automatically when the chain reaches the right block height.

New bitcoins enter circulation only as part of the reward paid to miners for adding a block to the chain. That reward has two parts: the block subsidy, which is newly created bitcoin, and the transaction fees paid by users whose transactions are included. The halving affects only the subsidy. Fees are set by demand for block space and are not halved.

Because the subsidy keeps halving, the rate at which new bitcoin is created falls over time and the total supply approaches a fixed limit of 21 million coins. The halving is the mechanism that makes Bitcoin's supply predictable years in advance.

The subsidy schedule

When Bitcoin launched in January 2009, each block paid a subsidy of 50 BTC. Blocks are found on average about every ten minutes, so 210,000 blocks take close to four years. After each 210,000 block period, the subsidy is cut in half.

The schedule so far has run from 50 BTC to 25, then 12.5, then 6.25, and since April 2024, 3.125 BTC per block. The next halving will reduce it to 1.5625 BTC. Because blocks have often been found slightly faster than ten minutes on average, halvings have tended to arrive a little earlier than an exact four year cycle would suggest.

• Blocks 0 to 209,999: 50 BTC per block
• From block 210,000 (November 28, 2012): 25 BTC
• From block 420,000 (July 9, 2016): 12.5 BTC
• From block 630,000 (May 11, 2020): 6.25 BTC
• From block 840,000 (April 20, 2024): 3.125 BTC
• Next at block 1,050,000, expected around 2028: 1.5625 BTC

The 21 million cap

Adding up every subsidy across all halving periods gives a total just under 21 million bitcoin. Half of all bitcoin was issued during the first four year period, a quarter in the second, an eighth in the third, and so on. More than 90% of the eventual supply has already been mined, even though issuance will continue for more than a century.

The subsidy is measured in satoshis, the smallest unit of bitcoin, equal to one hundred millionth of a coin. Each halving divides the subsidy by two and rounds down to a whole satoshi. After enough halvings the subsidy falls below one satoshi and becomes zero. That is expected to happen around the year 2140, after which miners will be paid only through transaction fees.

Changing the cap would require nearly every participant on the network to adopt new software with different rules, and there is broad agreement among users that the limit is a core feature. That is why the 21 million figure is treated as one of Bitcoin's most fixed properties.

What the halving means for miners

For miners, a halving is an overnight cut in the number of new coins they earn per block. If the bitcoin price and transaction fees stay the same, their revenue from the subsidy drops by half, while their costs for electricity, hardware, and facilities do not change. Miners with older machines or expensive power can become unprofitable and switch off.

The industry often measures this with hashprice, the expected revenue per unit of hashing power per day. A halving cuts hashprice sharply unless the price of bitcoin or fees rise to offset it. Over time the network adjusts: some hash rate leaves, the difficulty adjustment makes blocks easier to find for the miners who remain, and more efficient hardware replaces older equipment.

As the subsidy shrinks, transaction fees become a larger share of what miners earn. The April 2024 halving block itself carried unusually high fees because of a surge of activity from a new token protocol called Runes, launched at the same block. Whether fees alone can pay for strong network security in the very long run is an open and actively debated question.

The supply narrative

The halving is often described as a supply shock. The argument goes that if demand for bitcoin stays steady while the flow of new coins entering the market is cut in half, there is less fresh supply for buyers to absorb, which could support the price. Miners are natural sellers because they need to cover costs, so a lower subsidy means less routine selling pressure from them.

Supporters point to the fact that each of the earlier halvings was followed, within roughly a year or two, by a large rise in the bitcoin price and a new all time high. That pattern has made the four year cycle a popular framework for thinking about the market.

Critics note that the halving is announced years in advance, so in an efficient market much of its effect should already be reflected in the price. They also point out that daily new issuance is now small compared with total trading volume and with the bitcoin that existing holders can sell at any time, so each halving matters less for supply than the one before.

Why past patterns are not a guarantee

Only four halvings have happened so far. That is a very small number of examples, and each took place in a different environment, with different interest rates, regulation, market participants, and levels of adoption. Price moves after each halving coincided with many other events, which makes it hard to say how much the halving itself caused.

The market has also changed in ways that may weaken old patterns. Spot ETFs, public treasury companies, derivatives markets, and large institutional holders now influence price alongside miners and retail buyers. A pattern that held when bitcoin was a small, thinly traded asset may not repeat in the same way.

What is certain about the halving is its mechanics: the block height, the new subsidy, and the long term supply curve. What is not certain is how the market will react. This content is educational and not a prediction or a recommendation to buy or sell bitcoin.