Bitcoin's issuance is controlled by an event known as "the halving," which cuts the reward miners receive for adding a new block to the blockchain exactly in half. It happens automatically, on a schedule written into Bitcoin's software: every 210,000 blocks, roughly every four years given Bitcoin's target of one new block every ten minutes.

The halving exists to enforce Bitcoin's fixed supply of 21 million coins. Rather than issuing new bitcoin at a constant rate forever, the protocol steadily slows the pace of new supply entering circulation, similar in spirit to how a finite natural resource becomes progressively harder to extract. This built-in deceleration is what allows total supply to approach, but never exceed, the 21 million cap.

Bitcoin has gone through four halvings so far: the block reward dropped from 50 to 25 bitcoin in November 2012, from 25 to 12.5 in July 2016, from 12.5 to 6.25 in May 2020, and from 6.25 to 3.125 in April 2024. Each halving continues until the reward eventually rounds down to zero, expected sometime around the year 2140.

Past halvings have often been followed, sometimes many months later, by periods of significant price appreciation, which has led to popular narratives about halvings driving Bitcoin's price cycles. However, each of those periods also coincided with other developments - changing interest rates, new market participants, shifting regulation - so it is not possible to isolate the halving as the sole cause.

How future halvings will affect price, if at all, is not something that can be predicted with confidence, and this article does not attempt to forecast one. Past price behavior following a halving is not a guarantee of how the market will behave after any future halving.