A key part of Bitcoin’s monetary policy is a highly celebrated event that has historically been followed by a bull market for Bitcoin.

The fourth Bitcoin halving, which will reduce the supply of Bitcoin, is the next major milestone in the history of the world’s largest cryptocurrency. Data suggests that the halving—also referred to as “the halvening,” is a bullish event for Bitcoin overall, as it has led to higher prices after all 3 previous halvings—even if for a brief period of time. 

Out of all the FUD and FOMO in crypto, the halving is predictably imminent. You can expect it to happen every 210,000 blocks, or approximately every four years, which makes the halving the most anticipated market making event on the blockchain. 

The fourth Bitcoin halving is coded to occur at block 840,000, which is approximately 9 months away.

As of July 25, 2023, the Bitcoin network has passed 800,000 blocks. A block in the Bitcoin network is a collection of transactions that have been verified and added to the blockchain. When a block is created, it is broadcast to all nodes on the Bitcoin network to verify and add to their copy of the blockchain. The first node to verify a block is rewarded with newly-minted bitcoins.

As more Bitcoin is mined, the incentivized reward miners receive for verifying transactions is gradually reduced. Since the third halving, network participants who validate transactions are awarded 6.25 bitcoins (BTC) for each block successfully mined. After the fourth halving, the block reward will fall to 3.125.

Halving the Pie

By cutting the reward miners receive in half, the amount of new Bitcoin that is created each day is also cut in half. Over time, the impact of each halving will diminish as the block reward approaches zero.

How Many Halvings will Bitcoin Have?

Halvings are essential for the Bitcoin protocol; it helps to control the supply of BTC to ensure it becomes more scarce over time, which helps to increase its value.

It’s estimated there will be a total of 64 halvings before the final Bitcoin is mined in 2140.

More than 19 million of the 21 million fixed supply of Bitcoin has already been mined. No level of political or economic pressure can influence the amount of BTC in circulation, and no regulatory body possesses the authority to alter its schedule.

Can The Halving Make You Whole?

It’s possible that the price of Bitcoin will increase by a significant amount over the next few to several months after the halving. It’s also possible there will be a market correction several months afterwards. 

Halves and Have-Nots

Past performance isn’t indicative of future results—however, if history offers any indication, this is what we know:

• There’s been a significant price increase in Bitcoin following each halving. The average price increase over a 6-month window is 880%.
• After the price of Bitcoin increases, it often retreats, sometimes by as much as 90% before the price begins to appreciate slowly toward the next halving. 
• Although market volatility can be expected, market corrections after each halving have been smaller than the price increases that preceded them.

This cycle has repeated itself several times in the past:

• After the first halving occurred in November 2012, the price of Bitcoin increased by 660% over the next six months. The price then corrected by 50% before continuing to trend upwards.
• After the second halving occurred in July 2016, the price of Bitcoin increased by 1,200% over the next six months. The price then corrected by 70% before continuing to trend upwards.
• After the third halving occurred in May 2020, the price of Bitcoin increased by 1,000% over the next six months. The price then corrected by 50% before continuing to trend upwards.

DCA

Dollar-Cost Averaging empowers you to reduce your average purchase price of Bitcoin, and take the emotion out of your buying decisions.

DYOR

Do your own research. There are other factors that can affect the price of Bitcoin, such as overall market sentiment and the availability of fiat currency.