Halving

A halving is a deterministic rule in some proof-of-work cryptocurrencies that cuts the block-subsidy (the new coins paid to miners) in half at fixed block intervals, enforcing a disinflationary, capped supply. In Bitcoin this occurs every 210,000 blocks — about every four years — stepping issuance down toward its ~21 million coin limit. Because the schedule is encoded in the protocol and known years ahead, it is not new information when it arrives; any market reaction reflects expectations and behavior, not a supply shock. Halvings also squeeze miner revenue per block, which over time shifts the network’s economics toward transaction fees.

In plain English — A halving is a pre-programmed reduction — by 50% — in the reward miners receive for producing new blocks, which slows the rate at which new coins are created. Bitcoin halves roughly every four years (every 210,000 blocks) until its issuance approaches its fixed maximum supply. The event is widely discussed because it tightens new supply, but it is fully known in advance and does not guarantee any price outcome.

Bitcoin’s block reward fell from 6.25 BTC to 3.125 BTC at the April 2024 halving, roughly halving the daily issuance of new coins. The schedule is public, so the supply change itself is not a surprise to the market.