Bitcoin has an important pre-programmed feature, something we humans today reading will fail to see the end of, the mining reward, which will continue to halve until no more new Bitcoins will be put into circulation. Yes, these will stop around the year 2140 mark.
This event occurs approximately every four years depending on the speed of the chain; it is known as 'Halving' It also happens on other coins that are similar or forked from Bitcoin's open-source code.
In this article, we want to take you through the history of the price of Bitcoin throughout its halving so we know what to expect when Bitcoin comes up to its 4th halving event.
The Pre-halving period
Known as the Genesis Block, mined on the 3rd of January 2009 by the creator of Bitcoin, Satoshi Nakamoto, with the reward set to 50 BTC. However, it is worth nothing that Bitcoin in this phase was not worth anything as it was yet to be listed on any exchange, which happened 14 months later.
The supply of Bitcoin grew at a rapid rate, with 50 BTC as the reward for miners; this in a time when anyone could mine Bitcoin on laptops or any desktop device due to the low difficulty level.
Pre-halving period
Date: 3 January 2009
Block number: 0
Block reward: BTC 50
BTC created per day: 7200
BTC price at the start: N/A
BTC price 100 days later: N/A
BTC price one year later: N/A
The First Bitcoin Halving
28th November 2012 was the first halving, and something you are going to pick up on very soon in the patterns. At first, there was no big effect on the price; however, over time, the price started to rise. The price of Bitcoin is worth almost four figures from only $12 at the start, just one year later.
Just a note this was two years before the collapse of the main exchange in those days MTGox, which was responsible for over 90% of the volume in the industry.
First Halving
Date: 28 November 2012
Block number: 210,000
Block reward, BTC: 25
BTC created per day: 3600
BTC price at the start: $12
BTC price 100 days later: $42
BTC price 1 year later: $964
The Second Bitcoin Halving
Considering this was after the MTGox Collapse, which sent the crypto market down from all-time highs to nearly the lows, it was unclear at the time what would happen in this halving.
This took place on the 9th of July 2016, the date highly anticipated by the crypto community; I myself invested in Bitcoin 3 months after, and it was due to hype, turned out to be a great decision. This gave people a validation of acceptance, and Bitcoin become renowned, considering where it was just 18 months prior.
Later in this period, we had the ICO bubble; if you had any skin in the game back in those days, you'll remember how crazy things became. The price of Bitcoin reached levels we could not imagine. All the way to $20,000 18 months after halving.
Second Halving
Date: 9 July 2016
Block number: 420,000
Block reward, BTC: 12.5
BTC created per day: 1,800
BTC price at the start: $663
BTC price 100 days later: $609
BTC price 1 year later: $2550
The Third Bitcoin Halving
After the long bear market, which followed the price from $20,000 down to $3300 for Bitcoin, a lot of people has been looking forward to this event; however, with the Coronavirus sending the markets into meltdown, people didn't know what was going to happen.
I remember all the live streams influencers did celebrating the halving for it only to do nothing for a very long time; even 100 days later, the price was only up 15% from halving, but then things really changed with the economic climate due to the Covid-19 aftermath then people took notice of Bitcoin.
The price of Bitcoin 1 year later was $55816! For it to continue going higher in November to eventually topping out at $69,000. The magic recipe of hype and scarcity enabled the price to keep going higher; I want to say people wanted it to go even higher and even state that it did not hit the levels they expected. Maybe next time, eh?
Third Halving
Date: 11 May 2020
Block number: 630,000
Block reward, BTC: 6.25
BTC created per day: 900
BTC price at the start: $8740
BTC price 100 days later: $11,950
BTC price 1 year later: $55816
The next Bitcoin halving
The next halving is expected around April 2024. It will drop the block reward to 3.125 BTC. This article will be updated when it all happens.
Fourth Bitcoin Halving
Date: Around 2024
Block number: 840,000
Block reward, BTC: 3.125
BTC created per day: 450
Why Does Price Go Up?
An element that always gets my attention is the term 'Absolute Scarcity.' Bitcoin has a fixed supply; it also has elements where when Bitcoin is lost, it cannot be recovered. This makes the supply smaller. With there only being so many Bitcoins, and as demand increases, it increases the overall price because people WANT your Bitcoins.
Markets move in cycles; the halving cycle falls nicely around the presidential election period, so there is plenty of hype around finance and the markets. So it all seems to come into effect as one big 4-year cycle.