Impact of Bitcoin Halving on Market Prices

[Pablo-wood]

In the Bitcoin ecosystem a significant event takes place approximately every four years which aims at reducing the block reward by 50%. This four years gap is simply because having occurs in  every 210,000 block mined. It takes roughly 10 minutes to mine a block and if we are to calculate to test our accuracy

Code:

Number_of_blocks_per_halving = 210_000
Block_time = 10 # Block time measured in minutes  

First we will want to calculate the time in minutes

Code:

Block_time_in_minutes = Number_of_blocks_per_halving * Block_time
# 210_000 * 10  = 2_100_000 # minutes

Our goal is to find out how many BTC get mined per year if it equals 210,000
Convert to Days
We have 1,440 minutes in a day which is same thing as calculating (24 hrs * 60 mins)

Code:

Block_time_in_days = Block_time_in_minutes / 1_440
# Output: 1458.33
# Number of days it takes

Now lets focus on the big picture which is the year equivalent. Remember we have on average 365.25 days in a year where we also have to account for leap years;

Code:

# A typical year has 365 days
# A leap year has 366 days
# Leap years occur every 4 years with exception to years that are divisible by 100
# So in real sense we have 3 years that are 365 and a year that is 366 and so we have
years = ((365 *3) + 366)/4 #Output: 365.25
Block_time_per_year = Block_time_in_days / years 
#Output = 3.99years

Halving Events , date and block reward:

N	Year	Number of BTC
First Halving	November 28, 2012	25 BTC
Second Halving	July 9, 2016	12.5 BTC
Third Halving	May 11, 2020	6.25 BTC
Fourth Halving	April 19, 2024	3.125 BTC

Code:

# Calculating halving is simple...
The first block reward was 50 btc
# So if we divide this by 2 we get 25 btc
# We repeat this process for every four years
# The first four years we experienced after Bitcoin was launched was in 2012
# which is 2009 - 2012

Impact on Market Price
Understanding the principle of economics will give us the big picture of why price keeps pushing higher

Excess Demand (Shortage): When demand exceeds supply, prices tend to rise until equilibrium is reached.

Excess Supply (Surplus): When supply exceeds demand, prices tend to fall until equilibrium is reached.

We can now say if there is limited supply and excess demand prices will keep pushing higher. In this four years gap we see how bitcoin halving affected the price of Bitcoin. A break down of bitcoin halving event in the last four years

Halving

Price($)

First halving(November 2012)

pre-halving	aprox: $31	June 2011
post-halving	aprox: $1,100	November 2013

Second halving(June 2016)

pre-halving	aprox: $1,100	November 2013
post-halving	aprox: $19,700	December 2017

Third halving(May 2020)

pre-halving	aprox: $19,700	December 2017
post-halving	aprox: $69,000	November 2021

Fourty halving(April 2024)[a/b]

pre-halving	aprox: $69,000	November 2021
post-halving	aprox: $108,268	December 2024

[OcTradism]

There are Bitcoin halving count down timers.

https://www.bitcoinblockhalf.com/
https://watcher.guru/bitcoin-halving
https://www.coingecko.com/en/coins/bitcoin/bitcoin-halving
https://www.nicehash.com/countdown/btc-halving-2028-04-10-12-00-00

You can search for more if you need more.

Bitcoin halvings affect rewards for Bitcoin miners with Bitcoin halvings, there are more time required to mine similar 1 BTC.
Equivalent Network Time.

[Apocollapse]

Isn't this too quick? the peak should be happen in this year, while you make a stats using ATH in the last year.

I find something interesting, the first halving happened in November, then July, May and April. November to July is 4 months, July to May is 2 months, May to April is one month. So, the next halving should be 1/2 month from the last halving, it's either April again or late March.

Fourty halving(May 2020)

Small correction it should be fourth halving (April 2024).

[Pablo-wood]

Isn't this too quick? the peak should be happen in this year, while you make a stats using ATH in the last year.

We shouldn't make the same mistake we made sometime around December 2021 After we experienced $69k and price started retracing. Recall during the half that lead to that price pump many predicted bitcoin to hit $100k but rather it retraced and even fell down to $15,500 which happened in 2022.

Fourty halving(May 2020)

Small correction it should be fourth halving (April 2024).
[/quote]
Thanks for the correction that was an oversight. I am working on a time series model that should make predictions till 2028. It should be dropping in few days

[odolvlobo]

We can now say if there is limited supply and excess demand prices will keep pushing higher. In this four years gap we see how bitcoin halving affected the price of Bitcoin.

Sorry for being a broken record...

Not explicitly stated here, but a halving does not reduce the supply as many believe. The supply continues to increase with every block after a halving.


Also, it might be better to switch to to a log chart. On your linear chart, the 2011 bubble is undetectable and the 2013 bubble looks insignificant, when they were actually the biggest.

[Pablo-wood]

Not explicitly stated here, but a halving does not reduce the supply as many believe. The supply continues to increase with every block after a halving.

But what has been in circulation over the years and even on the internet is that the total supply of Bitcoin is 21million coin and 19 million has already been minted.