Bitcoin is considered the leader of the cryptocurrency market and conducted its first halving event 11 years ago. While the crypto community celebrates the anniversary of the first Bitcoin halving, it has not neglected to review Bitcoin’s historical turning points ahead of the next halving expected in April 2024. The first Bitcoin transaction took place a few months after Satoshi Nakamoto, the creator of Bitcoin, published the white paper in January 2009.
On November 28, 2012, three years and ten months after the mining of Bitcoin’s first block, the first halving event occurred. According to StatMuse data, Bitcoin was trading around $12 at that time. Although the halving events and the cryptocurrency’s 21 million supply limit are not directly explained in Nakamoto’s white paper, it hints at certain mechanisms to control Bitcoin’s new supply.
Contrary to some of the basic information in the Bitcoin white paper, the source code of Bitcoin mentions the halving event. In particular, the validation.cpp file found in the Bitcoin Core GitHub repository explains that miners’ block rewards will be halved every 210,000 blocks, which happens approximately every four years. The Bitcoin halving mechanism is programmed into the Bitcoin mining algorithm to take measures against inflation by balancing supply and demand.
Before the first halving event, miners were paid 50 Bitcoins per block, but the reward was reduced to 25 Bitcoins in the 2012 halving. The second halving in 2016 brought the reward down to 12.5 Bitcoins, and the most recent halving in 2020 reduced it to 6.25 Bitcoins. Since Bitcoin halving events significantly decrease the amount of cryptocurrency in circulation, the Bitcoin price cycle has historically been affected by halving events.
One year after the first halving event, Bitcoin rose to around $1,000, and a 350% increase was triggered within a year after the second halving; Bitcoin reached its all-time high of approximately $20,000 in December 2017. Following the third Bitcoin halving event, Bitcoin reached its latest all-time high (ATH) of $69,000 in November 2021.