# Bitcoin’s Block Reward Halving is One Year Away: Here’s What It Means

Bitcoin’s block reward is scheduled to drop from 12.5 BTC to 6.25 BTC on May 22, 2020 at 7:48:03 UTC. That’s less than a year away – so we decided to explore how bitcoin’s block reward halving will affect you.

## Bitcoin’s block reward gets cut in half every 210,000 blocks – or roughly every four years.

Originally set at 50 BTC per block, the reward was halved to 25 BTC in November 2012 before dropping to the 12.5 BTC reward we have today. On May 22, 2020, bitcoin’s block reward will get cut in half once again. Bitcoin’s block reward will drop from 12.5 BTC to 6.25 BTC.

The block reward may not halve exactly on May 22. This is the estimated date based on bitcoin’s average block time of 10 minutes. This block time tends to be an overestimate because bitcoin’s hashrate is increasing long-term, but the difficulty that controls the block time is only updated every 2,016 blocks or roughly every two weeks.

Based on today’s estimate, however, it’s expected bitcoin’s block reward will get sliced in half on May 22. So what does that mean for the value of bitcoin? What does that mean for the future of BTC? Will this have any impact on bitcoin whatsoever? Or is this just another over-hyped, pointless milestone?

Depending on who you ask, May 22 could lead to any of the above situations. Let’s take a closer look at what bitcoin’s next halving date might mean for the future of the world’s biggest cryptocurrency.

## The Vast Majority of Bitcoins Have Already Been Mined

First, it’s important to note that the vast majority of bitcoins are already in circulation. Bitcoin’s halving schedule means that the “emission” rate of bitcoin goes down steadily over time. Most bitcoins were mined in the early days of the currency when the block reward was set at 50 BTC. By the time bitcoin is in the year 2100 and beyond, the block reward will have dropped to just a fraction of a bitcoin.

To understand the impact of a bitcoin halving, it helps to look at some important bitcoin numbers.

• As of May 28, 2019, over 17.7 million have been mined, or about 85% of the total supply of bitcoin. Only 21 million bitcoins can ever be mined.
• That means there are only around 3.2 million bitcoin left to be mined.
• At today’s block reward rate, a total of 1,800 new bitcoins are generated per day.
• That gives us an inflation rate of around 3.78% per annum. The supply of bitcoin increases 3.78% per year, with that supply coming exclusively from bitcoin mining.
• On May 22, 2020, bitcoin’s inflation rate will get cut in half overnight. Instead of being 3.78% per year, the bitcoin inflation rate will be 1.80% (based on the supply at that future point in time).
• Today, approximately $15.8 million new bitcoins are mined each day (based on a price of$8,770 per BTC)

One of the best sources for bitcoin halving numbers is from BitcoinBlockHalf.com, which highlights the current bitcoin in circulation, the percentage of bitcoin mined, the inflation rate per bitcoin, and other data relevant to the next bitcoin halving.

### Will Bitcoin’s Price Jump After Halving?

After the two previous bitcoin halvings, bitcoin’s price went on a bull run. It makes sense: overnight, the supply of bitcoin gets cut in half, while the demand remains about the same. Prices will inevitably increase.

Many experts believe something similar will happen in May 2020 during the next bitcoin halving.

Of course, there’s a corollary to this effect: during the previous two bitcoin halvings, people weren’t really sure if the price would increase. There wasn’t enough precedent. Now, with the third Bitcoin halving about to take place, prices will almost certainly increase before the halving as traders seek to capitalize on the expected “halving boost”.

All of this adds up to one simple conclusion: bitcoin prices will most likely be very volatile around the time of the bitcoin halving. The price may skyrocket in the weeks leading up to the halving before dropping sharply immediately after the halving as traders seek to sell at the peak.

Eventually, markets are likely to settle in a smaller price band within approximately one week of the halving. However, based on previous halvings, it’s also possible we could see the start of a gradual bull market after the next halving, with the price gradually rising over a 12 to 18 month period.

As with any bitcoin price predictions, we really have no idea where bitcoin’s price will go after the May 2020 halving.

## Some Experts Believe the Halving is One of Several Reasons Why Bitcoin Will Continue Rising

Bitcoin’s block reward halving may cause prices to rise. However, it’s possible that bitcoin’s halving is just one of several factors fueling the next bitcoin bull market.

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