Every 210,000 blocks, or “halves,” the Bitcoin protocol reduces the reward it offers to miners by 50%; this is how the term “halving” came into the picture.
Bitcoin’s most recent halving took place on May 11, 2020, when block 630,000 was mined. This halving caused the block reward to decrease to 6.25 BTC. According to the Bitcoin algorithm, there will be 33 halvings in total, after which the fixed fraction of the block reward will become smaller than 1 satoshi (the smallest unit of Bitcoin) (the smallest unit of Bitcoin). It will essentially equal zero. There have already been three halves.
Bitcoin Pre-halving Period
The mysterious Satoshi Nakamoto, who created Bitcoin, mined the first block of the blockchain on January 3, 2009, also known as “Genesis Block” or “Block 0”. The original block reward for Bitcoin was set at 50 BTC by its inventor. In 2011, just a few months before the first halving, 50% of the total amount of Bitcoins was mined, and as a result, the price of Bitcoin rose from zero to 12 US dollars.
|Date||3rd January 2009|
|Block Reward (in BTC)||50|
|BTC Created Per Day||7200|
|BTC Price in January 2009||$0.01|
|BTC Price in February 2011||$1|
|BTC Price in June 2011||$29.60|
First Bitcoin Halving 2012
The initial halving happened on November 28, 2012. The price of Bitcoin initially showed no notable impact from the halving. But the coin’s value started to rise consistently in the beginning of 2013, and in April it had a dip before picking back up in the fall and reaching a high of $1,100.
|Date||28th November 2012|
|Block Reward (in BTC)||25|
|BTC Created Per Day||3600|
|BTC Price in November 2012||$12|
|BTC Price in April 2013||$250|
|BTC Price in January 2014||$770|
|BTC Price in December 2014||$320|
Bitcoin Halving 2016
On July 9, 2016, a second halving took place. The crypto community eagerly anticipated that day. A month and a half before the halving, at the end of May, a considerable BTC price increase started as a result of these expectations and a sharp surge in Bitcoin’s popularity and acceptance. A significant number of new participants entered the cryptocurrency market in 2017 as a result of the rapid growth in the acceptance and popularity of Bitcoin and other cryptocurrencies. Due to the fact that many ICOs accepted it, this in turn caused a “ICO bubble” to arise, which further boosted demand for Bitcoin.
|Date||09th July 2016|
|Block Reward (in BTC)||12.5|
|BTC Created Per Day||1800|
|BTC Price in July 2016||$663|
|BTC Price in January 2017||$1,100|
|BTC Price in December 2017||$19,834|
|BTC Price in December 2018||$3,740|
Bitcoin Halving 2020
Both the previous Bitcoin halving and the third halving, which occurred on May 11, 2020, did not result in an immediate price increase. The coronavirus outbreak that commenced in March 2020 resulted in the price of Bitcoin declining. But shortly after 2020, the price of bitcoin rose to nearly USD 50,000.
|Date||11th May 2020|
|Block Reward (in BTC)||6.25|
|BTC Created Per Day||900|
|BTC Price in May 2020||$8740|
|BTC Price in August 2021||$46,000|
|BTC Price in November 2021||$69,000|
|BTC Price in June 2022||$20,108|
Next bitcoin halving is scheduled for 2024. During the process it will drop the block reward by 3.125 BTC. The block reward will decrease by half about every four years until it reaches zero. Following that, the commissions on transactions included in the block will be the only compensation for miners.
Bitcoin Price Forecast
Public companies such as Microstrategy (MSTR), Coinbase (COIN), and Marathon Digital Holdings have added bitcoin to their balance sheets. If the bitcoin follows same trajectory as halving pattern suggest we may see the BTC price reaching a high of over $150,000 by 2024.