## Why Bitcoin Halving is Crucial for the Crypto Market

Bitcoin operates on a pre-programmed emission algorithm, where every four years an event occurs that radically changes the network's economy. This phenomenon is known as halving — a mechanism that halves the rewards for miners for validating blocks in the blockchain. In simple terms, halving is a built-in system for controlling the supply of the crypto asset, which slows down the growth of new coins and ensures their scarcity.

## How the Bitcoin Halving Process Works

Bitcoin halving is programmed to occur every 210,000 blocks, which corresponds to approximately a four-year cycle. With each halving, the reward for confirming a block is reduced by exactly half. This mechanism was established by the creator of Bitcoin at the launch of the network and operates without any human decisions — it is pure mathematics of the protocol.

The limit of 21 million BTC, which is the maximum supply of Bitcoin, is achieved through this very system of gradually reducing rewards. As the total number of bitcoins in circulation approaches the upper limit, the rate of creation of new coins slows down more and more.

## The History of Halvings and Previous Events

The first Bitcoin halving took place in 2012, when the reward for a block fell from 50 BTC to 25 BTC. The second event occurred in 2016, reducing the reward to 12.5 BTC. The third halving took place in 2020, after which the reward became 6.25 BTC for each new block. Each of these events was accompanied by significant volatility in the market and is often viewed by traders as a potential catalyst for price movement.

## When will the next halving occur and what will happen next

The next Bitcoin halving is expected to occur in April 2024 when the block height reaches 840,000. After this event, the block reward will be 3.125 BTC. Currently, over 90% of all Bitcoins that are to be mined have already been mined, and the last coin, according to forecasts, will be created only in 2140.

The 32nd halving will be final — after it occurs, new bitcoins will cease to be created entirely. By that time, the maximum supply of 21 million BTC will be reached, and the Bitcoin network will transition to a fully fee-based model for miner rewards.

## The Impact of Halving on Your Bitcoins and the Market as a Whole

It is important to understand that halving does not directly affect the number of bitcoins you own. Your balance remains unchanged regardless of whether this event occurs. However, the indirect impact can be significant — halving has historically put pressure on the price of bitcoin, affects mining profitability, and reshapes the dynamics of the entire cryptocurrency market.

Investors, traders, and analysts are closely watching the approach of halvings, as these events often become turning points in the long-term price cycles of Bitcoin. The tokenomics of BTC, based on this mechanism, makes Bitcoin fundamentally different from traditional currencies, which can be arbitrarily reissued by central banks.