Lesson 3 of 6 · 7 min

Halving and cycles without mythology

Halving is a pre-programmed reduction of the miners’ reward in Bitcoin. It happens every 210,000 blocks, which is roughly every four years. The reward for a new block has been halved four times so far: from 50 to 25 BTC in 2012, to 12.5 BTC in 2016, to 6.25 BTC in 2020 and to 3.125 BTC in 2024. The next one is expected around 2028 on this schedule. This is how issuance approaches the upper limit of 21 million coins.

What we know and what we just tell each other

It is a fact that after the previous halvings, within a period of several months to a year or more, the Bitcoin price did reach new highs, and those highs were followed by falls of more than 70%. From this grew the story of the four-year cycle. The problem is the sample: four events are too few for a statistical conclusion.

• Simultaneous causes: at the same time interest rates, the money supply, regulation and access to the market were all changing. We cannot isolate what halving alone did.
• Known schedule: the date is known years in advance. If the effect was obvious, it is rational to expect the market to try to price it in earlier.
• The market changes: in March 2024, before the halving itself, Bitcoin had already reached a new record, which did not happen in earlier cycles. The launch of spot Bitcoin ETFs in the US at the beginning of that year contributed to this.
• Shrinking scale: with each halving, the relative change in issuance compared to the existing supply gets smaller, and that supply already exceeds 19 million coins.

How to use this in practice

Treat halving as broader context, not as a signal. You can write into your plan that in phases of strong optimism, when everyone talks about a “new era”, you do not increase risk, and when sentiment is bad, you do not sell in panic just because that is what happened before. You still make decisions by your own rules on the chart and by position size. If your plan depends on the cycle repeating to the day, that is not a plan but a hope.

Also check what is happening with altcoins. It is often said that an “altcoin season” is coming after Bitcoin rises. Such periods did occur, but they are not a rule, and many tokens from past rallies never returned to their old levels.