What you should know about the Bitcoin halving cycle

Originally published on August 7, 2024. Last updated on May 9, 2025.

Every four years, something happens in crypto that shakes the market: Bitcoin halving. It’s not just a technical tweak; it’s a countdown to potential price surges, increased scarcity, and major investor interest.

Think of Bitcoin halving like a gold mine producing half as much gold every 4 years. The reduced output makes the remaining gold more valuable if demand holds steady.

This guide will break down the Bitcoin halving cycle, its historical significance, and what it means.

Key takeaways

• Bitcoin halving occurs every 210,000 blocks (roughly every 4 years), cutting miner rewards by 50%. This reduces the rate at which new bitcoins enter circulation, reinforcing Bitcoin’s 21 million supply cap.

• Historically, Bitcoin halvings have preceded significant price increases, though not always immediately.

• The most recent halving happened on April 20, 2024, reducing the block reward from 6.25 to 3.125 BTC.

• The next halving is expected in March-April 2028, and its impact is still up for debate.

• Institutional adoption and macroeconomic factors now play a larger role in price dynamics than in earlier cycles.

What is the Bitcoin halving cycle?

Bitcoin halving is a pre-programmed event every 210,000 blocks—about every four years. Each halving cuts the miners’ reward for processing transactions by 50%.

When Bitcoin was first introduced, miners could claim a 50 BTC reward for each block they helped verify. In 2012 the reward was cut to 25 BTC, 12.5 BTC in 2016, and 6.25 BTC in 2020. Bitcoin halving in 2024 cut the reward to just 3.125 BTC for every block of transactions added. This Bitcoin halving cycle will continue until we reach the 21 million Bitcoin limit.

Here’s a look at the bitcoin halving timeline and how it has changed over time:

The next halving is projected for April 13th, 2028, reducing the reward to 1.5625 BTC per block. This cycle will continue until around 2140, when the last bitcoin is mined.

💡 Fun fact: By 2032, roughly 98% of all bitcoins will have been mined, but the final fraction will take decades due to diminishing rewards.

Why Does Bitcoin Halving Matter?

Halving is more than just a technical event. It’s a fundamental component of Bitcoin’s economic model. By slashing the rate at which new bitcoins are created, each halving reduces future supply and adds to Bitcoin’s scarcity.

1. Bullish effect on the market

A pattern emerges after each Bitcoin halving. In 2016, the BTC value was 665 USD before the halving, reaching 2,250 USD a year later. The 2020 halving happened earlier in the year, in May. By the end of that same year, BTC reached a price of 29,000 USD—the highest it would go that year.

At this point, assuming a bull run follows every Bitcoin halving cycle is safe.

So, why do bull runs follow every cycle?

Bitcoin was created based on the law of supply and demand. The supply of new Bitcoin is gradually reduced with each Bitcoin halving cycle. Low supply generally means a higher price.

There is also a lot of buzz before the scheduled Bitcoin halving date. Google Trends data showed that the number of people searching for ‘Bitcoin halving’ spiked tremendously leading up to the 2020 Bitcoin halving cycle:

Combine low supply with record-level demand, and you may have the perfect recipe for all-time-high Bitcoin prices.

While correlation isn’t causation, past halving cycles have followed a clear pattern:

• 2012 Halving: BTC rose from ~$12 to over $1,100 in November the following year.

• 2016 Halving: BTC surged from ~$650 to nearly $20,000 by late 2017.

• 2020 Halving: BTC went from ~$9,000 to an all-time high of ~$69,000 in November 10th, 2021.

💡 These price trends contributed to the belief that Bitcoin moves in four-year market cycles, each tied to a halving event.

Source: Bitcoin Magazine

There also seems to be a lot of buzz just before the scheduled Bitcoin halving date. Google Trends data showed that the number of people searching for ‘Bitcoin halving’ spiked tremendously leading up to the 2020 Bitcoin halving cycle:

Combine low supply with record-level demand, and you may have the perfect recipe for all-time-high Bitcoin prices.

2. The bearish part of the cycle

Source: Cointelegraph

While it’s nice to think of the Bitcoin halving cycle as an instant way to pump Bitcoin’s value, we must remember that it’s only temporary. The market will always correct itself when the buying frenzy cools down.

Historical data shows that bear conditions can last around 12 months after a bull run. Bitcoin’s value would normally be much lower, only starting its upward climb again a few months before the next Bitcoin halving cycle.

For example:

• After the 2017 peak, Bitcoin fell to ~$3,200 by late 2018.

• Post-2021 highs, Bitcoin dipped below $17,000 in 2022.

3. How halving affects miners

Bitcoin’s halving has a direct impact on miners profitability. With rewards slashed, only the most efficient mining operations—those with access to cheap energy and modern ASIC hardware—can remain viable.

Key impacts:

• Higher break-even costs: Miners may need BTC prices to rise post-halving to stay profitable. For example, Bitfarms, a publicly traded mining company, reported a cost of revenue per bitcoin mined at roughly $36,000 in late 2023, suggesting tighter margins post-halving

• Network Hashrate fluctuations: Some miners may temporarily exit the network, reducing hashrate and potentially increasing block confirmation times.

• Consolidation: Smaller miners may shut down or merge with larger firms, concentrating mining power further. Regions with cheap and renewable energy sources, such as

  hydroelectric power in Quebec and Iceland or stranded natural gas in Texas, have become hubs for efficient mining operations, further concentrating mining power geographically.lly

4. Effect on Altcoins

When Bitcoin experiences halving-driven volatility, altcoins often follow suit—but not always in predictable ways.

Here’s how altcoins are typically affected:

• Short-term rotation: Some traders move profits from BTC into altcoins, fueling short-lived alt rallies. For example, following the 2016 halving, Bitcoin’s market dominance dropped from about 98% to under 40% within 18 months, while altcoins surged by over $286 billion. Similarly, after the 2020 halving, Bitcoin dominance fell from 66% to 40% within a year, with altcoin market cap soaring from $90 billion to over $1.2 trillion.

• Increased correlation: The broader crypto market often mirrors BTC’s trend post-halving, especially during bull runs. Investors seeking higher returns often target altcoins, which can lead to rapid price increases but also increased volatility.

• Mining shifts: GPU miners unable to profit from BTC may pivot to mine altcoins like Litecoin, Ethereum Classic, etc.

So, what’s different about the 2024–2028 halving cycle?

Unlike previous cycles, the 2024 halving arrives in a more complex economic environment. Here is what to watch out for:

Macroeconomic to Watch

• Less money printing: Unlike the 2020 cycle, which benefited from massive quantitative easing, central banks are raising interest rates to combat inflation.

• Global uncertainty: Geopolitical tensions like the China-US trade wars, and economic slowdowns could dampen risk appetite for assets like Bitcoin.

• Crypto market recovery: The industry is still rebuilding trust after the collapses of 2022 (e.g., Terra, FTX).

Reasons for Optimism in this Cycle

Despite the headwinds, there are signs of strength:

• Institutional adoption: Bitcoin ETFs, launched in 2024, have attracted billions in inflows, signaling mainstream acceptance.

• Layer 2 protocols like the Lightning Network are seeing renewed adoption, helping boost transaction scalability.

• HODLer resilience: Chainalysis data shows long-term holders are accumulating, reducing available supply on exchanges.

When is the next Bitcoin halving?

The next Bitcoin halving is expected around 2028, at block 1,050,000. At that point, miner rewards will drop to 1.5625 BTC per block. Whether this triggers a massive bull run or a more muted response remains to be seen. However, one thing is clear: Halving remains a defining feature of Bitcoin’s value proposition.

While it’s too early to predict exact outcomes, here are key factors to consider:

• Diminishing Impact: As block rewards shrink, their economic influence may wane, with transaction fees becoming a larger miner incentive.

• Market maturity: Bitcoin’s growing adoption as a store of value and payment method could stabilize price volatility.

• External variables: Regulatory developments, institutional investment, and global economic conditions will play a bigger role than in past cycles.

How to Prepare for the Bitcoin halving cycle

To navigate the 2024–2028 Bitcoin halving cycle, consider these strategies:

1. Stay Informed: Track on-chain data (e.g., Glassnode, CryptoQuant) and broader macroeconomic indicators like inflation, interest rates, and geopolitical trends. These signals often influence investor sentiment and capital flows into Bitcoin.

2. Diversify: Balance Bitcoin holdings with other assets to mitigate volatility.

3. Use Dollar-Cost Averaging (DCA): Invest fixed amounts regularly to smooth out price swings.

4. Secure your assets: Use hardware wallets and avoid risky platforms. Always remember: Not your keys, not your coins. Make security non-negotiable.

5. Think long-term: Halving cycles reward patience, as bull runs often lag the event by months. Don’t get discouraged by sideways movement or corrections immediately after the event. Instead, use this period to accumulate and position for potential future gains.

6. Do your own research (DYOR): Always do your own research extensively before committing. Plenty of research is available on various aspects of Bitcoin, including the risks and rewards. Make it a point to go beyond the hype, influencers, or headlines. A good starting point is to start with the Bitcoin whitepaper to understand the fundamentals.

👉Learn more about: Dollar cost averaging(DCA) in crypto.

Bottom line

The Bitcoin halving cycle is more than a technical event—it’s a cornerstone of Bitcoin’s economic model and a driver of market cycles. By reducing supply and amplifying scarcity, halvings have historically set the stage for significant price rallies, though macroeconomic and industry factors add complexity to the 2024–2028 cycle.

Whether you’re a trader, HODLer, or newcomer, understanding the Bitcoin halving cycle equips you to make informed decisions in this dynamic market.

The next halving in 2028 will test Bitcoin’s staying power as it matures. Will it spark another bull run, or will its impact soften as the market evolves?

👉Related:

1. Bitcoin Price History: A Look Back at Every All-Time High

2. 10 Tips For Securing Your Bitcoin Wallet

3. List of the Best Bitcoin Hardware Wallets

Important note: These materials are for general informational purposes only and do not constitute financial, investment, or professional advice. Cryptocurrency investments involve significant risks, including potential substantial financial loss, and we do not endorse specific investments, tokens, or projects. Always conduct your own research and consult qualified financial or legal professionals before investing, as Omni.app disclaims liability for any losses arising from reliance on these materials, to the fullest extent permitted by law.