Understanding Bitcoin Halving: Process, Impact on BTC Price, and Future Implications

Bitcoin halving, occurring approximately every four years, is a fundamental event in the cryptocurrency's calendar. With a fixed supply of 21 million bitcoins, the reward for miners is halved after every 210,000 blocks are mined, ensuring deflationary pressures and potentially increasing the value of bitcoin over time. This reduction in mining rewards, known as halving, has occurred three times previously—in 2012, 2016, and 2020—with the most recent halving in 2020 seeing the reward drop from 12.5 to 6.25 BTC per block. The upcoming halving, expected around 2024, will further reduce the reward to 3.125 BTC per block. Historically, each halving event has been associated with a surge in bitcoin's price due to increased demand, as observed after the 2020 halving, where bitcoin's price soared from $9,700 to over $67,000 within a year. This phenomenon, however, poses challenges for miners as their rewards diminish, potentially leading them to explore alternative cryptocurrencies for mining.