11th Anniversary of Bitcoin’s First Halving: From $12 to $37,000
11 years ago today, Bitcoin experienced its first-ever halving, and since then its price has soared from $12 to its current price of $37,000.
The first Bitcoin transaction occurred nearly 15 years ago on January 3, 2009, just a few months after Bitcoin’s pseudonymous creator, Satoshi Nakamoto, released the Bitcoin white paper in October 2008.
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On November 28, 2012, three years and 10 months after the first Bitcoin block was mined, the first halving event occurred. At the time, BTC was trading at around $12, according to StatMuse, which is 308,200% below Bitcoin’s current price, according to CoinGecko.
Although the Bitcoin halving and the digital currency’s supply cap of 21 million are not directly described in Satoshi Nakamoto’s white paper, the document still hints at some mechanism to control the creation of new BTC. The white paper reads:
“To compensate for increases in hardware speed and changes in interest in running nodes over time, the proof-of-work difficulty is determined by a moving average against the average number of blocks per hour. If they are generated too quickly, the difficulty increases .”
Unlike some basic information in the Bitcoin white paper, the halving aspect is mentioned in the Bitcoin source code. The halving details can be found in the valid.cpp file in the Bitcoin Core GitHub repository, and states that miners' block subsidies "halve every 210,000 blocks, which occurs every four years."
The Bitcoin halving mechanism has been programmed into the Bitcoin mining algorithm to offset inflation by maintaining scarcity.
Before the first halving occurred, miners were compensated up to 50 BTC per block. After the first halving in 2012, the subsidy was slashed to 25 BTC, followed by the second halving in 2016, which reduced the subsidy to 12.5 BTC. The most recent Bitcoin halving occurred in 2020, cutting the block subsidy from 12.5 BTC to 6.25 BTC.
The Bitcoin price cycle has historically been affected by halvings as they significantly increase the scarcity of the cryptocurrency.Just a year after the first halving, Bitcoin had risen to nearly $1,000, while the second halving triggered a 350% surge within a year of the event, with Bitcoin subsequently rising to nearly $1,000 in December 2017. All-time high of $20,000.
Following Bitcoin’s third halving, BTC surged to an all-time high of nearly $69,000 in November 2021.
On the anniversary of the first Bitcoin halving, the cryptocurrency community is awaiting the fourth Bitcoin halving, which is currently expected to occur on April 17, 2024. Many Bitcoin advocates are particularly bullish on Bitcoin prices as U.S. securities regulators raise their expectations for Bitcoin prices in 2024. Spot Bitcoin exchange-traded funds may eventually be approved.
However, the 2024 halving will not be the last. Bitcoin miner rewards are expected to be halved 34 times until they reach 0 BTC after all 21 million Bitcoins have been mined. According to the current schedule, the maximum supply of Bitcoin will reach 21 million coins around 2140.
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