Bitcoin halving 2028: what to know

What is bitcoin halving?

Bitcoin halving (or halvening) is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. Bitcoin halvings are scheduled to occur once every 210,000 blocks – roughly every four years – until the maximum supply of 21 million bitcoins has been generated by the network.

Bitcoin halvings reduce the supply of new coins, so prices could rise if demand remains strong. This has happened in the months before and after previous halvings, causing the price of bitcoin (BTC) to appreciate rapidly. However, the circumstances surrounding each halving are different and demand for the cryptocurrency can experience drastic fluctuations.

Why does bitcoin halve?

Bitcoin halves due to the design of its software, which was created by a mysterious person or group using the assumed pseudonym ‘Satoshi Nakamoto’.

While Satoshi Nakamoto hasn’t explained the reasons behind halvings, many have speculated that the system was designed to distribute coins more quickly at the beginning to incentivise people to join the network and mine new blocks. Under this theory, block rewards were programmed to halve at regular intervals because the value of each coin rewarded was deemed likely to increase as the network expanded.

Another theory is that the halvings were put in place to introduce deflationary measures into the coin, so the number of new coins rewarded per block is pre-determined. In the fiat monetary system, overprinting by central banks can result in sustained reduction in the value of the currency. In bitcoin, this risk is hedged through the fixed total supply available and the pre-determined rate of printing new bitcoins.

One criticism of bitcoin’s design – including halvings and the finite supply of 21 million coins – is that it encourages users to save rather than spend. This may have fuelled boom and bust cycles in the past, with users hoarding coins – in hopes that coins will increase in value over time – only to cash out at key levels. Some have compared bitcoin to pyramid and Ponzi schemes, arguing that the system’s design has disproportionately rewarded users who got in early.

How does bitcoin halving work?

Bitcoin halving is built into the network’s underlying blockchain software, which dictates the rate at which new bitcoins are created. The software requires computers in the network to compete to verify transactions through a process known as ‘mining’.

Transactions are verified in groups called ‘blocks’ and the network is coded to halve the reward received by miners after every 210,000 blocks. The reward is a number of new bitcoins, eg 3.125 BTC per block, when they can prove that the transactions they’ve selected are valid. 

What happens to miners when the bitcoin reward is halved?

When the block reward is halved, some users may calculate that their mining activity will no longer be profitable due to costs such as electricity and hardware. Some users may stop mining altogether if the price of bitcoin doesn’t rise to offset the reward cut.

Having less users leads to a reduction of processing power in the network. But it shouldn’t affect the speed at which blocks are mined, as the software automatically adjusts the difficulty of verifying transactions to maintain a steady rate.

What happens when all 21 million bitcoins have been mined?

When the maximum supply of 21 million bitcoins has been mined, users will no longer receive bitcoins for verifying blocks. However, they’ll continue to receive transaction fees – contributed by those making payments – as an incentive to verify transactions.

It’s estimated that the last new bitcoin will be mined in the year 2140. At this point, the cryptocurrency could become deflationary as coins can be ‘lost’ through user error – for example, by sending coins to an invalid address.

How bitcoin halving affects BTC’s price

It’s not yet clear how the next halving will impact bitcoin’s price. Many commentators believe that the price will follow a similar pattern to the previous four halvings, rising after the event itself as the supply of new coins is constrained.

However, any price rise will depend on how demand for bitcoin shapes up over the course of the halving. Demand is by no means certain to increase – or even remain static – as there are other well-established cryptocurrencies competing for users.

What happened the last time bitcoin halved?

The last bitcoin halving happened on 20 April 2024 at a block height of 840,000 – this was bitcoin's fourth halving event. Block height is a position in a blockchain, counted by the number of confirmed blocks before it. During this halving, the block reward was reduced from 6.25 BTC to 3.125 BTC per block.

During the bitcoin halving of 20 April 2024, the cryptocurrency was trading at approximately $64,000. The price was relatively volatile in the weeks leading up to the halving, having reached an all-time high of around $73,000 in March 2024 before experiencing a retracement.

This data has been sourced from coinmarketcap.com. Please note that all figures refer to the past and that past performance is not a reliable indicator of future results. It’s also worth noting that this chart is in USD (US Dollars), results may be different in other currencies. The return may increase or decrease as a result of currency fluctuations.

Price of bitcoin during previous halvings

• 11 May 2020: the coin's price surged from around $6,900 on 11 April (a month before its third halving) to about $8,800 at the time of the event itself. Widespread institutional adoption of bitcoin began to take shape around late 2020. Despite significant volatility, the cryptocurrency’s price continued to rise over the course of the next year, reaching over $60,000 in March 2021
• 9 July 2016: bitcoin’s second halving occurred at a time when bitcoin was gaining more mainstream attention, even though it was still considered a relatively niche investment. Bitcoin was trading at about $650 per coin during its second halving. By the end of 2017, bitcoin had reached its then-all-time high of nearly $20,000
• 28 November 2012: representing bitcoin’s early days, the cryptocurrency was trading at approximately $12 per coin during its first halving. Despite this halving occurring long before bitcoin’s mainstream adoption, the crypto’s price appreciated significantly over the next year, eventually reaching around $1,000 by November 2013

Please note that all figures refer to historical performance, which is not a reliable indicator of future results. All amounts are quoted in US dollars, and outcomes may differ in other currencies. Returns may increase or decrease due to currency fluctuations. This data has been sourced from coinmarketcap.com.

When is the next bitcoin halving?

The next bitcoin halving is expected to occur mid-2028, when the number of blocks hits 1,050,000. It will see the block reward fall from 3.125 BTC to 1.5625 BTC. The exact date of the halving isn’t yet known as the time it takes the network to generate new blocks varies, with an average of one block every ten minutes.

Bitcoin halvings; key events

A bitcoin halving occurs after 210,000 blocks have been mined – this happens approximately every four years. This is expected to continue until around the year 2140, when all 21 million coins have been mined.

How to trade the bitcoin halving

There are two ways to trade bitcoin’s halving. You can speculate on the price of the cryptocurrency using derivatives such as CFDs, or buy the coins outright via an exchange. Learn more about cryptocurrency trading and how it works.

To trade on bitcoin with us:

1. Learn more about CFD trading on crypto
2. Open an account or practise on a demo
3. Search for 'bitcoin' on our platform
4. Open your position

One of the main benefits of trading cryptocurrencies with derivatives such as CFDs is that you don’t take ownership of the underlying coins. This enables you to:

• Trade without an exchange account or wallet: with IG, you could be set up and ready to trade in minutes. Please note while trading without an exchange account or wallet, you do not own or have any interest in the underlying asset.
• Go long or short: you can take a position on bitcoin whether you expect it to rise or fall in value
• Take advantage of leverage: you can open a position by putting down a deposit – known as margin – to gain access to a much larger market exposure

However, it is also important to note that all CFD trades are leveraged, meaning profits and losses can substantially outweigh your initial margin, and you can incur losses rapidly.

FAQs

Try these next

Footnotes: 
¹ Number 1 in Australia by primary relationships, CFDs & FX, Investment Trends November 2024 Leveraged Trading Report.