Satoshi Nakamoto 
There was a time when people were crazy for the fiat currency, but after 2008 financial crises everything changed and now people show their interest in cryptocurrencies which offer a decentralized and potentially more transparent alternative. Among them one is Bitcoin, which is #no 1 crypto coin, adopted as legal tender in a limited number of countries. This is one of the best and attractive crypto coin among investors as it gave high returns in last 10 years.
Bitcoin is not only the first cryptocurrency, but its system and its value growth have attracted a lot of investors. One of the main reasons for Bitcoin’s success is its unique balance of supply and demand, which is maintained through an important process called “Bitcoin Halving”. The supply of this crypto coin is limited and hence its value increase in long term as compared to other coins. If you check its chart of last 10 years, you will find out the value of 1 coin increased from $500 to $100000. Its price was in 2021 jumped to $60,000, then dropped to $16,000 and once again jumped to $100000 in 2025.
What is Bitcoin Halving?
Bitcoin Halving is a programmed process of the Bitcoin network, in which the reward received through Bitcoin mining is halved every four years. This process is activated whenever 2,10,000 blocks are mined on the Bitcoin network. The purpose behind this is to gradually limit the supply of Bitcoin and keep it rare.
The total supply of Bitcoin is limited to 21 million, and this limit cannot be exceeded. When miners add a new block, they get new bitcoins as a reward. But the process of halving reduces these rewards. For example, when Bitcoin was introduced in 2009, miners used to get a reward of 50 bitcoins on every block. The first halving took place in 2012 and the reward decreased to 25 bitcoins. Similarly, it was reduced to 12.5 in 2016 and 6.25 bitcoins in 2020. Recent bitcoin halving done in April 2024, and the reward decreased to 3.125 bitcoins.
So far, 4 Bitcoin halving done, 28 left and last will be done in year 2140. The next Bitcoin halving will be in April 2028 and later it will done on 2032.
Why is this process important?
The importance of Bitcoin halving is very high for its supply chain and pricing. Since the supply of Bitcoin is limited, its new supply is controlled through halving. As per the report of coinbase.com, The halving reduces supply of new bitcoins entering the market, which could potentially lead to price appreciation if demand remains constant or increases. This makes Bitcoin seen as a rare commodity, due to which its demand increases (it is volatile, the price can drop too but general perception the price will increase in long term).
History is witness to the fact that after halving, there is a sharp increase in the price of Bitcoin. For example, after the first halving in 2012, the price of bitcoin increased from $12 to $1,150. After the second halving in 2016, the price increased from $650 to $20,000. Similarly, after the 2020 halving, bitcoin rose from the level of $8,000 to an all-time high of $69,000. And after the 2024 halving, the price of 1 BTC crossed $100000.
Why does this increase in price happen? The main reason for this is the law of supply and demand. When the supply of new bitcoins decreases after the halving, there is a shortage of it in the market. During this time, if the demand increases or the demand remains stable, then the prices naturally rise.
Do investors benefit from halving?
As per the article published on cleartax.in, Bitcoin halving can be a golden opportunity for investors, the halving event is always good news. This is because there is a high possibility of prices rising after the halving. However, it is also important to keep in mind that the volatility in the crypto market is quite fast and there is also risk involved. Investors should always take a long-term view and make decisions keeping in mind the market situation.
The effects of halving are not limited to prices only. It also affects the stability of the Bitcoin network and the profit of miners. When the reward is halved, the miner has to take care of his operating costs and profits. This promotes improvement and innovation in the mining process.
Are there any negative effects of Bitcoin halving?
There are some potential negative effects of Bitcoin halving. As the reward of miners is reduced, some small miners who invest heavily in high energy costs and equipment may have to stop their activities. This may affect the network’s hash rate, which is important for the security of the Bitcoin network.
In addition, market volatility may also increase during halving. Some investors consider it an opportunity to buy or sell Bitcoin on a large scale, which can lead to huge fluctuations in prices.
Will the importance of Bitcoin halving increase in the future?
The bitcoin halving process will continue until 2140, when all 21 million bitcoins are mined. However, with each new halving, the reward will decrease so much that it will hardly be felt.
Despite this, investors and experts believe that bitcoin halving will always be an important aspect of it. It will not only keep bitcoin scarce but also maintain its potential to increase in value.
Conclusion
Bitcoin halving is a complex but important process that has established it as digital gold. It offers investors a unique opportunity, but it also comes with risks. Any investor should invest with an in-depth understanding of the market and focus on long-term gains and for this you should take advise from financial manager or expert!
If you are planning to invest in bitcoin, it is imperative to understand the information related to halving and its impact in long term. This will not only strengthen your investment strategy but will also help you deal with market fluctuations in a better way. You can give wings to your portfolio and beat the inflation!
