3 Reasons I'm Still Looking Forward to Bitcoin's Next Halving

The next Bitcoin halving—scheduled for mid-2024—will mark the fourth time in its history that the cryptocurrency’s block reward halves, reducing the rate at which new coins enter circulation. For skeptics, this event might seem like a relic of Bitcoin’s early design. But for believers, it’s a structural feature that could catalyze another leg of its price trajectory. Here’s why I remain optimistic about its potential impact.

1. Scarcity in Action: Bitcoin’s Supply Is Becoming Even More Limited

Bitcoin’s supply is governed by a hard cap of 21 million coins, with new coins created through mining. Every four years, the block reward halves—a mechanism designed to mimic the extraction of a finite resource like gold. The upcoming halving will reduce the reward from 6.25 to 3.125 BTC per block, cutting the annual new supply by roughly half.

Ask Aime: How will the upcoming Bitcoin halving affect prices?

This reduction in supply growth matters because Bitcoin’s adoption is still in its early stages. Today, only about 19 million of the 21 million BTC have been mined, leaving roughly 2.1 million left. With institutional and retail investors increasingly treating Bitcoin as “digital gold,” the looming scarcity could amplify its appeal as an inflation hedge.

Historically, halvings have preceded periods of rising scarcity-driven demand. For example, after the 2020 halving, Bitcoin’s annual supply growth rate fell to just 1.7%, compared to 3.7% before the event. This tightening supply coincided with a surge in institutional interest, as seen in the launch of Bitcoin futures ETFs and corporate treasury allocations.

2. A Proven Historical Pattern—But Can It Repeat?

Bitcoin’s price performance following previous halvings has been striking. After the 2012 halving, Bitcoin rose from ~$12 to ~$1,150 in 2013—a 9,500% increase. The 2016 halving preceded a 1,500% rally to $19,783 in late 2017. Even the 2020 halving, which occurred during a global pandemic, saw Bitcoin climb from ~$9,000 to nearly $65,000 in 2021.

Critics argue that past cycles may not repeat due to Bitcoin’s maturation. However, the fundamental drivers—scarcity, adoption, and speculation—remain intact. What’s different this time is that Bitcoin’s ecosystem has deepened: derivatives markets, lending platforms, and mining infrastructure are more robust, potentially mitigating volatility.

3. Miners Are Here to Stay—But at What Cost?

Halvings put pressure on miners, whose revenue drops by 50% as block rewards shrink. This forces miners to rely more on transaction fees and drives efficiency. But rather than causing a collapse, this dynamic has historically strengthened Bitcoin’s network.

Since 2017, Bitcoin’s hashrate—a measure of network security—has grown tenfold despite two halvings. This resilience suggests miners are adapting. They’re consolidating into large-scale operations, adopting energy-efficient ASICs, and diversifying revenue through fees. Even after the 2020 halving, Bitcoin’s hashrate hit an all-time high, indicating that miners still find profitability in the ecosystem.

Conclusion: A Structural Tailwind Amid Uncertainty

Bitcoin’s next halving is more than a technical event—it’s a catalyst for its evolution. Scarcity will tighten, historical patterns suggest a bullish trajectory, and miners will continue securing the network despite reduced rewards. While Bitcoin’s price remains volatile and influenced by macroeconomic factors (e.g., interest rates), the structural drivers of its value are as strong as ever.

Consider this: since Bitcoin’s inception, its supply has grown by an average of 16.4% annually. After 2024, that rate will drop to just 1.0%. With global assets under management exceeding $100 trillion and central banks experimenting with digital currencies, Bitcoin’s role as a decentralized, inflation-resistant asset has never been more relevant.

The halving won’t guarantee a price boom, but it will underscore Bitcoin’s unique properties—properties that have drawn trillions in speculative capital over the past decade. For investors with a long-term horizon, that’s reason enough to stay optimistic.