Bitcoin’s next halving won’t happen until 2028. Here’s what could happen in the meantime.

Few events have as much influence on Bitcoin (CRYPTO: BTC) as its halves. Occurring once every four years, they form the basis of Bitcoin’s monetary design.

Bitcoin’s halving — the reduction of the mining reward — has led to consistent and recognizable patterns over the years since its launch in 2009. While past performance does not guarantee future results, the reliable nature of halving intervals provides data useful for investors. The next halving won’t happen until 2028, and understanding these patterns could shed light on potential market developments between now and then.

What are Bitcoin halvings and why do they matter?

Every 10 minutes or so, a new “block” is created on the Bitcoin blockchain. A Bitcoin halving happens every 210,000 blocks, which translates to roughly once every four years. When these events occur, the rewards in new Bitcoin that miners receive for processing transactions and securing the network are halved, reducing the rate at which new Bitcoin enters circulation.

When Bitcoin was first launched in 2009, the block reward was 50 BTC. The first halving in 2012 reduced it to 25 BTC, followed by 12.5 BTC in 2016, and then to 6.25 BTC in 2020. This year’s halving reduced the reward to 3.125 BTC per block, sending Bitcoin’s annual rate of inflation to less than 1%. This process will continue until 2140 when the last Bitcoins will be mined.

Halving is a deliberate feature of the Bitcoin protocol, designed to control inflation and ensure that the total supply of Bitcoins that can ever exist is capped at 21 million. By reducing the rate at which new Bitcoin is created, halvings put upward pressure on the price of Bitcoin, assuming demand remains constant or increases. Historically, this deflationary mechanism has been a key driver of Bitcoin price appreciation as it introduces scarcity into the market.

What could happen before the next half-life?

So what could happen between now and the next halving predicted in 2028? Well, for now, it looks like the market is in an uptrend and hasn’t peaked yet. Cryptocurrency analyst Benjamin Cowen compared Bitcoin price movements over the past three cycles in the chart below, and his analysis suggests that the current market still has room to grow.

If past trends hold, this bull market could see a peak sometime in 2025. While predicting the exact price is challenging, it is reasonable to expect Bitcoin to achieve significant growth from current levels.

But eventually, what goes up must come down. As euphoric as peak periods of Bitcoin Bull markets can get, painful and brutal crypto winters usually set in just as quickly.

For example, during the last market cycle, Bitcoin fell from a high of $68,000 to $34,000 in just two months, eventually reaching $16,000 by the end of 2022. This type of volatile price action has has been consistent in previous cycles and could very well repeat itself as we approach 2026 and 2027.

But history tells us that periods of contraction are often followed by new phases of growth, and there are reasons to believe that 2028 could be a year when Bitcoin rises again from a crypto winter.

Navigating Bitcoin Cycles

While no one can accurately predict the future, Bitcoin’s historical patterns are hard to refute and provide valuable information for investors. Understanding these cycles can help investors navigate Bitcoin’s volatility by recognizing it as part of a larger trend toward higher prices over time.

Although the current bull market has probably not yet peaked, it will eventually give way to a bear market. But if there’s one thing history has taught us, it’s that these periods present opportunities to accumulate cryptocurrencies at lower prices, positioning investors for potential gains as the next halving approaches.

Should You Invest $1,000 In Bitcoin Right Now?

Before buying shares in Bitcoin, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Bitcoin was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $630,099!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

See the 10 stocks »

*The stock advisor returns as of September 3, 2024

RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Bitcoin’s next halving won’t happen until 2028. Here’s what could happen in the meantime. was originally published by The Motley Fool