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This article will identify the date of the next bitcoin halving, explain its significance, and speculate on potential bitcoin price outcomes.
When Is The Next Bitcoin Halving?
The next Bitcoin halving will occur sometime in 2024, most likely between February and June.
The next Bitcoin halving will reduce the number of new bitcoins issued by the network by 50%, hence the “halving” of the supply rate.
Currently, 6.25 new BTC are created and introduced to the existing supply every 10 minutes, per the Bitcoin protocol.
Following the next halving, 3.125 new BTC will be issued by the network every 10 minutes.
This will remain the issuance rate until Bitcoin’s next halving event, sometime in 2028.
Bitcoin 2024 Halving Significance
One reason why Bitcoin follows a preprogrammed supply schedule is to have a fair distribution of coins.
If all 21 million coins were made available when Bitcoin was first created, people who discovered it very early would own all the coins.
Bitcoin’s creator, Satoshi Nakomoto, decided to have the 21 million coins distributed over a period of ~130 years by having a programmatic supply schedule.
Every 10 minutes, new BTC enter the supply via a block reward to miners.
And every 210,000 blocks that are mined (which takes about four years), the number of new BTC that enter the supply is halved.
This process continues until all 21 million BTC have been issued, which is predicted to occur in 2140.
Bitcoin’s supply rate will be halved 32 times throughout its lifespan.
The 2024 halving will mark the 4th of 32 reductions.
2024 Bitcoin Halving Impacts
Bitcoin is a disinflationary asset, meaning that its inflation rate decreases over time.
It currently has an inflation rate of around 1.78%.
The rate falls with each subsequent halving as less bitcoin enters the supply with each new block. The 2024 halving will drop bitcoin’s inflation rate below 1.00%
The chart below shows Bitcoin’s supply (blue) compared to its inflation rate (orange).
The stepwise reductions in Bitcoin’s inflation rate are caused by the immediate halvings of supply rate that occur every 210,000 mined blocks.
The amount of new BTC that enters supply every 10 minutes is shown along the x-axis, starting with the number 50.
The block reward halvings are generally expected to occur every four years, but they are determined by block height milestones.
Here’s the schedule based on block height:
- 0 to 210,000 blocks: 50 BTC block reward (pre-halving)
- 210,000 to 420,000: 25 BTC block reward (1st halving era)
- 420,000 to 630,000: 12.5 BTC block reward (2nd halving era)
- 630,000 to 840,000: 6.25 BTC block reward (3rd halving era)
- 840,000 to 1,050,000: 3.125 BTC block reward (4th halving era)
- 1,050,000 to 1,260,000: 1.5625 BTC block reward (5th halving era)
So on and so forth until all 21 million have been issued via block rewards, which will occur after the 32nd halving.
The Next Bitcoin Halving Effect on Price
Historically, halvings have dictated the four-year price cycles that bitcoin trades in.
And they appear to have a psychological effect on the price of bitcoin:
Many market participants value bitcoin based on its scarcity, so watching its issuance get cut in half may increase their demand for the asset.
However, the market is well aware of these halvings events, and they should theoretically be priced in. But time and time again, they are not.
While the top of the third halving era is still unknown, similar price action from the previous cycles would put the peak bitcoin price around $450K-$520K.
Given such a small sample size, these predictions should be taken with a grain of salt.
An eventual top in the 3rd halving era will increase the sample size to n=3 and allow us to better predict the 2024 halving’s effect on price.
Bottom Line: When Is the Next Bitcoin Halving?
There’s plenty of time to prepare for the next halving — it’s still over 2 years away.
If history repeats itself in 2024-2028, or at the very least rhymes, the price of bitcoin could potentially exceed $1M.
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This article is for informational purposes only. It is not intended to be investment advice.