The Next halving of Bitcoin

A bitcoin halving takes place about every four years, and the next one will take place next year, in 2024. 

To be precise, the Bitcoin protocol is designed to perform a halving every 210,000 blocks. Since it typically takes about 10 minutes for a new block to be mined, about 144 blocks are mined per day, or more than 4,300 per month. 

We are currently at just under 800,000 blocks mined, so there are still 40,000 to go before we reach the next one. In less than ten months, we should reach the fateful 840,000 block mark, which will trigger the fourth halving.

The estimated date of the next Bitcoin halving

In fact, there is not always 10 minutes between one block and the next. 

Mining a block means randomly searching for an alphanumeric string called a hash that validates it, and this search has unpredictable times because it is random. 

However, it can be done in such a way that, on average, it takes about 10 minutes to find it, and this means that the so-called block time always remains fairly close to 10 minutes. 

In May, for example, it was almost always slightly below this threshold, while in June it was often slightly above. 

At the beginning of 2023, on the other hand, the block time was almost always below 10 minutes, which slightly shortened the estimate of the next half-yearly date. 

This means that estimating the date of the next halving is not precise, even if you know for sure that it will happen exactly at block number 840,000. 

It also depends on how you do it, i.e. whether you calculate it using the theoretical average block time of 10 minutes, or the current average block time, or the average block time of the last few months or years. 

However, almost all estimates suggest that block number 840,000 will be mined between April and May next year, perhaps in late April or early May, triggering the fourth halving.

Bitcoin: Past halving and expecting the next one in 2024

In the beginning, in 2009, Bitcoin was only mined by Satoshi Nakamoto and a handful of other early adopters, and it was mined quite quickly. 

In fact, although the first block was mined on 3 January 2009, block number 210,000, which triggered the first halving, was mined on 28 November 2012, or 1,425 days later, or just under 3 years and 11 months. 

The second cycle saw an even shorter block time, as block number 420,000 was mined on 9 July 2016, exactly 1,319 days later, or just over three years and seven months. 

Even in the third cycle, the overall average block time was less than 10 minutes, so that block number 630,000 was mined on 11 May 2020, after exactly 1,402 days (just under three years and 10 months). 

It is possible that even this time it will take less than the theoretical 1,458 days, so block number 840,000 will almost certainly be mined before 11 May 2024. 

Incidentally, on the day of the first halving, the price of BTC was around $12, while on 9 July 2016 it had already risen to $663.

In May 2020 it was around $9,000, although it was still recovering from the collapse of the financial markets two months earlier due to the start of the pandemic.

The impact on the price

The halving in itself has no direct effect on the price of Bitcoin. 

However, it does reduce the selling pressure from miners, and this generally reduces the selling pressure in general. 

This was more noticeable in the past when there were many mined BTCs, but as the number of mined BTCs decreases, this effect becomes less and less. 

However, the reduction in selling pressure is not enough to push the price higher, so no real bull run has ever started in the days immediately following a halving. 

So far, however, all three halving events have been followed by a full-blown speculative bubble that inflated the following year (2013, 2017 and 2021). 

This bubble has always burst in the following year, but in no case has the price of BTC after the bubble burst fallen below the value of the previous halving. 

The 2014 bear market low was reached in January 2015 at $172, a level more than a hundred times higher than the $12 of the first halving. 

The 2018 low was around $3,200, or about five times the July 2016 price, and the 2022 low was $15,500, or just under twice the May 2020 price.

What is Halving?

Halving literally means half. 

Halving is the reward to the miner. 

In fact, anyone who managed to mine a block was initially rewarded with 50 BTC, created out of nothing. 

This means that the first 210,000 blocks created about 10 million bitcoins out of a possible 21 million. 

The first halving halved this reward to 25 BTC. Block number 420,000 created a further 5.2 million bitcoins, bringing the total to over 15 million. 

The second halving reduced the reward to 12.5 BTC, so that by May 2020, when block number 630,000 was mined, a total of more than 18 million bitcoins had been created. 

The third halving reduced the reward to 6.25 BTC, and the fourth will reduce it to 3.125 BTC. To date, 19.4 million bitcoins have been created, and at this rate, the fateful total of 21 million will be reached by 2140. 

It is clear from these figures why the halving will reduce the selling pressure on the miners, not least because they have to buy electricity to do their work, and this has to be paid for in fiat currency. 

So in effect they are forced to sell a large proportion of the BTCs they collect, but as these shrink over time they end up selling less and less.