What is Bitcoin halving and when will it happen?

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What is Bitcoin halving?

Bitcoin halving is an event that halves the rate at which new Bitcoins are created and it is designed to happen once every four years. As we know, Bitcoin’s (BTC) supply is limited. Once 21 million coins are generated, the network will stop producing more. That is one of the main reasons Bitcoin is often referred to as “digital gold”, just like with the yellow metal, all of it will have been extracted someday.
Right now, there are around 18 million BTC in circulation, which is roughly 85% of the total cap, but it doesn’t mean that the it is about to reach its limit any time soon. The reason is the protocol, which has been coded into the blockchain from the beginning: Every 210,000 blocks, it performs the so-called Bitcoin “halving” or “halvening,” and producing new coins becomes harder, just like in gold mining where finding new deposits becomes more difficult over time.
More specifically, the protocol cuts the block reward in half. So, every time a Bitcoin halving occurs, miners receive 50% fewer BTC for verifying transactions.

When will the next Bitcoin halving happen?

Bitcoin halving will happen on May 11 or 12, depending on where you are based.
The date is not 100% certain at this point because the time taken to generate new blocks may speed up or slow down. On average, the network produces one block in ten minutes.
The last halving is expected to happen sometime in the year 2140 as the 21-millionth BTC is mined. Once that happens, miners will stop receiving block rewards, but will keep the remaining source of revenue, fees paid by the transactions, which they also collect.

Will the Bitcoin price change?

Historically, the price has increased after a halving, but it ultimately depends on the supply/demand ratio.
Essentially, Bitcoin halving cuts down the supply of it, making the asset more scarce. If the demand is there, the price is likely to surge. There are also some historical precedents. On Nov. 28, 2012, the day of Bitcoin’s first halving, the cpryptocurrency’s price rose from $11 to $12, and went on to climb up throughout the next year, reaching $1038 on Nov. 28, 2013.
Roughly four years later, a month before the second halving, Bitcoin’s price started to follow a similar, bullish pattern. It surged from $576 on June 9 to $650 on July 9, 2016, the day the block’s reward was reduced by half for the second time in the asset’s history. Again, BTC carried on to accelerate through the next year, albeit with occasional turbulence, and traded at $2526 on July 9, 2017.
How will it be the next time? Skeptics believe that the halving has already been priced in. Although, there is no scientific way to verify this.
Additionally, the industry has drastically changed over the last four years, as cryptocurrencies — and Bitcoin in particular — became an essential part of mainstream news coverage. Still, some might be tempted to take the chance, especially given the previous patterns exhibited around Bitcoin halvings.
As a result, if history repeats itself and the Bitcoin price starts going up in April 2020, even more traders might start buying the asset out of a fear of missing out, thus stimulating the demand, and, finally, the price.

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