The second bitcoin halving: the block reward is halved from 25 BTC to 12.5 BTC

The second Bitcoin halving occurred on July 9, 2016. This event marked the completion of 210,000 blocks since the previous halving, and as per the design of Bitcoin’s deflationary monetary policy, the block reward for miners was halved from 25 BTC to 12.5 BTC.
 

The halving mechanism is embedded in Bitcoin’s code and occurs approximately every four years. It is a critical feature that ensures the total supply of Bitcoin caps at 21 million, making it a scarce digital asset. Leading up to the halving, there was much speculation about its potential impact on Bitcoin’s price and miner profitability. Some feared that the reduced block reward would lead to a drop in the hash rate as mining became less profitable for individual miners. However, these concerns were largely unfounded as the network continued to grow stronger post-halving.
 

In the year following the second halving, Bitcoin experienced a remarkable bull run. The price of Bitcoin, which was approximately $650 on the day of the halving, surged to around $2,560 within 12 months, marking a valuation increase of nearly 294%. This growth trajectory highlighted the increasing acceptance of Bitcoin as a legitimate investment asset and its resilience against initial skepticism.
 

The halving also had a profound effect on Bitcoin’s inflation rate, which was reduced from 8.7% to 4.1% by August 2016. This reduction in new Bitcoin issuance further solidified its comparison to gold as a store of value, with a predictable and diminishing supply.