Bitcoin Halving 2024. Will This Time Be Different?

Every four years, Bitcoin halving dominates the crypto news.

It’s more anticipated than the Ethereum Merge and even the Bitcoin Taproot Upgrade. It’s associated with rallies and new all-time highs, and some investors spend years preparing for it.

Could the Bitcoin halving of 2024 be different?

This event benefits everyone but miners because it halves block rewards.

And if miners can’t sustain the network, the Bitcoin blockchain dominance could come to an end. The problem worsens after the last Bitcoin is mined and there are no more block rewards.

What does that mean for 2024, and how do you prepare? Let’s find out.

Quick Takes:

• The Bitcoin Halving of April 2024 will reduce rewards to 3.125BTC per block. Based on previous ones, this event will increase network fees, congestion, and BTC prices in the short term. It tends to centralize mining as the reduced profit margins drive away smaller miners.
• Bitcoin halving has a low influence on mining fees, block time, and blockchain upgrades. The increased demand and difficulty adjustment help Bitcoin protect its value while halving inflation.
• While there’s no guarantee that the 2024 Bitcoin halving can restart a bull market, it does increase volatility. The mining community has changed, along with global crypto regulations and mass adoption.

What Does Bitcoin Halving Mean?

Part of what makes Bitcoin valuable is its programmed scarcity. The founder Satoshi Nakamoto designed it to control inflation and stabilize the token supply. There can only be 21M Bitcoins, and it takes exponentially longer to reach that cap.

Even though there are already +19M tokens, the last Bitcoin halving is expected for 2140.

For a simple Bitcoin halving definition, here’s the context:

• The process of validating transaction blocks is called Bitcoin mining. Every validated block generates new Bitcoin as “block rewards” and “miner fees” (also in BTC).
• While fees are variable and set by miners, rewards are programmed. The first-ever block rewarded 50 BTC— plus fees— only to the miner who validated it.
• Rewards halve to 25BTC, 12.5BTC, and 6.25BTC every 210,000 blocks (1% of 21M). Mind that the number of blocks doesn’t necessarily match the BTC supply. As of January 2023, there are ~773,000 blocks and 19,269,131 circulating Bitcoins. Less than half came from actual rewards.

Thus, on the next multiple of 210,000, Bitcoin rewards fall to 3.125BTC. As the 4th halving, that’s block no. 840,000. But why 2024?

Well, the blockchain regulates mining difficulty so every new block takes ~10min to generate:

840,000 - 773,000 = 67,000 blocks left (or 10m intervals)

67,000 converts to ~465 days. That’s April 24th, 2024, or as late as June. 

Interestingly enough, miners don’t increase network fees after halving:

It’s always averaged <100 Satoshi per transaction (less than $10). The highest was $62.78 due to high network congestion. Compared to Ethereum, that’s low:

What’s So Special About 2024 Bitcoin Halving?

BTC Halvings from 2024 and on have more price impact because of the diminishing supply and increasing demand. 

Originally there were ~1.3M Bitcoins, which expanded to 10M by the 2012 halving, ~15M by 2016, and ~18M by 2020. With ~19M today, we might see multiple halvings before 20M BTC. Supply has barely increased since 2020, making every halving more impactful for market demand.

So the volume and prices should be more volatile than ever before. As for 2023, the average 24h volume is above $40B. The occasional $20B lows are the all-time highs in the previous halving.

That doesn’t mean that 19M Bitcoins are tradeable:

• There are over 4M Bitcoin lost (and counting) on forgotten/misspelled wallets.
• Another 1.8M BTC is held by miners
• 15% of Bitcoins belong to 111 wallets, and 40% to ~2,000. It’s rumored that Satoshi Nakamoto might have over 20,000 different addresses with +1M BTC.

That leaves less than 10M tokens, which favors Bitcoin demand and price. Along with the increased trading volume, this halving brings a higher chance of all-time highs and altcoin market recovery. Short term, the opposite is more likely. Expect network congestion and millions of Bitcoin ready for sale.

FAQ

Are halving events exclusive to Bitcoin?

They’re not. Halving events are common among the first cryptocurrencies that use proof-of-work:

• Litecoin, Bitcoin SV, and Bitcoin Cash also halve every ~4 years starting at 50-token rewards.
• “Dash reduction” reduces rewards by 7.14% every 210240 blocks (one year)
• Monero uses “tail emissions,” which reduces all block rewards to 0.6 XMR after generating 18.4M tokens. There’s no hard cap.
• Ethereum neither has supply limits. But it did reduce rewards after the Merge via “Triple Halving.” It was a one-time event that reduces rewards to ~1/10th as a transition to proof-of-stake.

Even Dogecoin halving existed before they removed max supply in 2015.

Can we speed up Bitcoin halving?

It’s possible to speed up the halving event by verifying transactions faster. Bitcoin upgrades (Segwit, Taproot…), high network fees, and better hardware can speed up block validation. At least, for about two weeks. 

That’s because Bitcoin modulates mining difficulty every 2016 blocks. So even with a quantum computer, you may win most blocks, but it’s still 10 minutes each. Slowing down won’t work either.

How exactly can I see that Bitcoin has halved?

If you already know what the Bitcoin blockchain looks like, the process is just as straightforward:

• Find the BTC explorer on websites like Blockchain.com
• Go to the list of blocks and click on the latest one. You’ll see something like this:

• If you read the “Minted” line, 6.25BTC is the reward for block 773,097.

If you checked later on block 840,000, it will be 3.125BTC.

Here’s proof of the last Bitcoin halving before and after:

How is the Bitcoin rainbow chart related to the 2024 halving?

The Bitcoin rainbow chart uses multiple formulas to include all previous BTC prices within the same area. The upper limit follows the all-time highs, and the lowest one, local price bottoms. According to this chart, every Bitcoin halving moves the price up by ~10x, then down by ~75%, and it doesn’t rally again until the next halving.

But the chart doesn’t predict Bitcoin, only follows it. After 2022, it no longer matched the price action, so they had to find another formula that matches new prices. It’s an arbitrary trendline.

The Bottom Line

The Bitcoin Halving Event is coming up in 2024.

The last few halvings has preceded multiple crypto bull runs.

Will 2024 be the same?