Bitcoin halving event now just a month away, expected to occur on 4/20

Bitcoin BTC -1.19% ’s next halving event is now just a calendar month away with approximately 4,450 blocks to go, according to estimates from The Block’s Bitcoin Halving Countdown page.

The estimated countdown is based on Bitcoin's average block generation time of 10 minutes, setting a potential date of April 20 at around 8 a.m. EDT at the current pace. Bitcoin’s next halving event will see the reward for miners on the network drop from 6.25 BTC to 3.125 BTC per block.

Bitcoin halvings are programmed to occur automatically every 210,000 blocks — roughly every four years. Once a halving event occurs, miners receive 50% fewer bitcoins as a reward for every block of transactions they mine and add to the blockchain. However, they continue to earn additional transaction fees for each block mined as usual.

There have been three halving events in Bitcoin's history, reducing its block reward inflation from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016 and 6.25 BTC at the last halving on May 11, 2020. In the long term, there will only ever be 21 million bitcoins in existence. The halving events will continue until the last bitcoin is expected to be mined around the year 2140. After this, miners will only earn from transaction fees.

The impact of Bitcoin halvings on the market

Historically, Bitcoin halvings have been associated with significant fluctuations in the cryptocurrency's price. While not a direct cause-and-effect relationship, these events have often preceded substantial bull runs in the bitcoin market.

“It's widely agreed upon that Bitcoin halving events tend to have a positive impact on its price, a trend observed throughout history. These events typically foster optimism among crypto investors, resulting in favourable price movements before and afterwards,” OSL Head of Markets Jean-David Péquignot noted on Wednesday. “The upswing in price can be ascribed to various factors. Primarily, the decrease in the supply issuance rate underscores Bitcoin's scarcity, thus amplifying demand and subsequently driving its price higher.”

Bitcoin halving not 'priced in'

Also, Wednesday's ETC Group report stated that their quantitative analysis of the performance differences 100 days after Bitcoin halvings is so significant that it is unlikely to be random. They concluded that the upcoming halving is most likely not priced into the current market.

"Our model suggests that bitcoin’s equilibrium price could increase to $103,000 by the end of 2024, to $172,000 by the end of 2025 and ultimately to $215,000 by the end of the next Bitcoin epoch in 2028," ETC Group analysts said in a note sent to The Block.

The report added that the impact of the halving will not be visible immediately "but will be reflected gradually over time as the supply deficit induced by the halving itself accumulates only gradually over time."

Bitcoin’s price slid 10% from a peak of $68,136 to a low of $61,506 yesterday amid record outflows from the U.S. spot bitcoin ETFs. The cryptocurrency fell further to a low of $60,771 earlier on Wednesday before recovering. 

Tuesday, analysts at research and brokerage firm Bernstein suggested the drop represented a “dip buying opportunity” ahead of the halving event.

Bitcoin is currently trading at $63,994, according to The Block’s price page, up over 50% year-to-date.

BTC/USD price chart. Image: The Block/TradingView.