New-Japan Business Consulting
Business strategy reports, business matching and M&A in Japan


Bitcoin half-life arrives in April 2024

What is the Bitcoin half-life?

The Bitcoin Half-life is a key process built into the Bitcoin network protocol. It is designed to reduce the mining reward for a new block by half every 210,000 blocks, an event that occurs approximately every four years. The last Bitcoin halving event took place on 11 May 2020.

This event ensures that the number of bitcoins earned by miners (miners) decreases over time, which is important for bitcoin to be a deflating asset. The next bitcoin half-life is scheduled for April 2024 (experts expect around 16 April), when mining rewards will decrease from 6.25 bitcoins per block to 3.125 bitcoins.

Why is this important? Bitcoin’s half-life plays an essential role in maintaining its value over time. By limiting the rate at which new bitcoins flow into the market, it helps to prevent inflation and retain bitcoin’s purchasing power. This controlled supply is also why it is called ‘digital gold’, analogous to the mining of precious metals such as gold, making it attractive as an investment.

The following analysis explores the price volatility of bitcoin before and after each half-life event. While future outcomes may not exactly replicate past patterns, these trends can be reflected upon to reveal the potential implications of past half-lives.

First half-life (28 November 2012): before the half-life, bitcoin was $11. After the half-life, it soared to over USD 1,000 by November 2013 due to media attention and adoption as a payment method.

Second half-life (9 July 2016): before the half-life, bitcoin was $650; by December 2017, it had soared to almost $20,000 due to increased speculation and interest in cryptocurrencies (virtual currencies).

Third half-life (11 May 2020): before the half-life, the initial price was around USD 8,800; after the half-life, in April 2021, the price soared to over USD 64,000, thanks to its establishment as a means of storing value amid economic uncertainty and entry by institutional investors.

Historical impact on bitcoin price Previous half-life events have been turning points that have significantly increased bitcoin’s market value; the half-lives in 2012, 2016 and 2020 are particularly notable for their significant impact on the price, highlighting their potential to deeply influence market trends The following are some of the most important events in the past few years.

Translated with (free version)