It has now been slightly more than a year since the last Bitcoin (BTC -1.43%) halving took place. Its performance since then has been underwhelming, to say the least. While Bitcoin is up 56% since April 2024, that performance pales in comparison to what happened after three previous halving events.
In 2012, 2016, and 2020, Bitcoin posted triple-digit and even quadruple-digit gains, so investors were expecting big things from the 2024 halving. What’s going on here, and what should you expect from the next halving in 2028?
Comparison of previous Bitcoin halving cycles
Bitcoin halving events take place roughly every four years. They are highly anticipated not just by Bitcoin investors, but by the entire crypto industry. The halving of mining rewards, which refers to an algorithmic process that controls rewards paid out to Bitcoin miners, has historically been the signal for a massive new crypto bull market rally to take place.
One look at the numbers will tell you why investors get excited about the halving cycle. According to data from crypto analytics firm Kaiko, the first Bitcoin halving took place in 2012, and resulted in Bitcoin soaring from a price of $12.35 to $964, for a gain of nearly 8,000%. The second Bitcoin halving took place in 2016, and resulted in Bitcoin soaring in price from $663 to $2,500, for a gain of 277%. The third Bitcoin halving took place in 2020, and resulted in Bitcoin skyrocketing from a price of $8,500 to $69,000, for a gain of 762%.
Image source: Getty Images.
So you can understand why investors were counting on Bitcoin to soar in value after the April 2024 halving. It seemed like the easiest, no-brainer trade you could possibly make: Buy Bitcoin before the halving event, and then wait for it to rise in price.
Potential factors for underperformance
In hindsight, there are a number of reasons why the 2024 halving turned out to be a relative nothing-burger (like a cheap $2 fast food burger with no toppings and a stale bun).
You could blame macroeconomic factors for Bitcoin’s underperformance. You could blame current tariff uncertainty and the threat of a major trade war. You could even blame the launch of the new spot Bitcoin ETFs, which introduced a fundamentally new dynamic in the way people buy and sell Bitcoin.
Or maybe crypto enthusiasts are simply misinterpreting the historical data. For example, the previous Bitcoin halving took place in May 2020. That coincided with the COVID-19 pandemic, which eventually led to the lowering of interest rates and new stimulus packages. Remember when the U.S. government was mailing out stimulus checks? So maybe it wasn’t the halving that resulted in Bitcoin soaring in price in 2020-2021, but Uncle Sam.
What about the next halving?
The next Bitcoin halving will tentatively take place in March 2028. I don’t know the exact date, because Bitcoin is a decentralized digital currency. There is no central planning apparatus to set a date. The halving takes place when another 210,000 blocks have been added to the Bitcoin blockchain by Bitcoin miners, so the final tick of the clock will depend on how quickly the Bitcoin mining community can churn through the next 210,000 data blocks. Online, you can find various crypto firms providing countdown clocks to the next halving, based on estimates of new Bitcoin block creation.
So what will happen after the next Bitcoin halving? My prediction is that most people won’t even be talking about the 2028 halving event. By then, the whole global financial system may look entirely different, and a quirky algorithmic change to Bitcoin won’t interest many people.
It’s important to point out here that many people misinterpret the Bitcoin halving. They think that it refers to a halving of the overall coin supply, and that’s why they think the price of Bitcoin is bound to shoot up after every halving. From this flawed perspective, it’s just basic supply and demand: A reduction in supply means the price goes up.
However, the Bitcoin halving refers to a halving in the rate of new Bitcoin creation. Guess what? Only 21 million Bitcoins can ever exist. It’s hardcoded into the mining algorithm. 19.86 million of them are already in circulation. By 2028, that figure will be approximately 20.5 million. At that point, 97.7% of all Bitcoin that can ever exist will already be on the market. So slowing down the rate of new Bitcoin supply at that point shouldn’t have a profound effect on price dynamics.
Just to be clear, the core Bitcoin economic model remains in place — it’s not as if something changed overnight. Bitcoin miners are still getting paid their rewards for mining new blocks. However, the size of those rewards were cut in half in 2024 (and will be cut in half again in 2028, and so on). Theoretically, appreciation in the price of Bitcoin should help to compensate for this. That was certainly the pattern over previous Bitcoin halving cycles, so the next halving event in 2028 will likely help to boost the price of Bitcoin as well.
Supply vs. demand
If you’re counting on the next Bitcoin halving to make you a crypto millionaire, think again. Based on Bitcoin’s performance after the 2024 halving, it’s quite likely that any boost to the price of Bitcoin will be limited at best.
In fact, it’s quite likely that, by 2028, investors will stop focusing so much on the “supply side” of Bitcoin, and focus instead on the “demand side” of Bitcoin. An explosion in new demand — from institutional investors, corporations, and sovereign governments — is what is going to create the next big rally in the price of Bitcoin.
