Bitcoin’s next halving now just two weeks away

Bitcoin BTC +1.42% ’s next halving event is now just two weeks or approximately 2,000 blocks away, according to The Block’s Bitcoin Halving Countdown page. 

The estimated countdown is based on Bitcoin's average block generation time of 10 minutes, setting a potential date of April 20 at around 1 p.m. ET, as things stand. Bitcoin’s next halving event will see the reward for miners on the network drop from 6.25 BTC to 3.125 BTC per block. 

Bitcoin halvings are programmed to occur automatically every 210,000 blocks — roughly every four years. Once a halving event occurs, miners receive 50% fewer bitcoins as a reward for every block of transactions they mine and add to the blockchain. However, they continue to earn additional transaction fees for each block mined as usual.

There have been three halving events in Bitcoin's history, reducing its block reward inflation from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016, and 6.25 BTC at the last halving on May 11, 2020. In the long term, there will only ever be 21 million bitcoins in existence.

The halving events will continue until the last bitcoin is expected to be mined around the year 2140. After this, miners will only earn from transaction fees.

Bitcoin halving could be ‘priced in’

Historically, Bitcoin halvings have been associated with significant fluctuations in the cryptocurrency's price. While not a direct cause-and-effect relationship, these events have often preceded substantial bull runs in the bitcoin market.

Whether the Bitcoin halving is "priced in" gets thrown about every time the event comes around. However, there is one data point that makes a case for it being "priced in" this time.

"This is the first halving cycle which saw bitcoin breach its all-time high before the halving, which could mean that the effect has already been priced in by savvy traders," Coinbase analysts David Duong and David Han said in a note sent to The Block this week.

However, the analysts added that there is still a collective belief that the halving might drive prices up, "which could result in behavior that results in a rally."

The impact of new US spot Bitcoin ETFs

This time around, Bitcoin is closer to an all-time high relative to previous halving events. “However, the approval of the spot ETFs contributed to a significant change in BTC's supply-demand dynamics, which could impact price during and after the halving,” Kaiko noted earlier this week.

“ETFs have seen strong overall inflows, which could suggest an immediate positive price impact as supply continues to drop,” the Kaiko analysts added. “However, ETFs can also see rapid outflows which exacerbates selling pressure for the underlying asset during periods of market stress. So far, we have seen only one week of net outflows, but this could change.”

Coinbase analyst David Duong agreed that the current bitcoin rally is largely a result of this new phenomenon amid spot ETF inflows and rising institutional interest, which have "irrevocably altered" the bitcoin market. "This means that bitcoin's response to the upcoming halving may not necessarily mirror its performance in prior cycles," he added.

Although outflows from Grayscale’s converted higher-fee GBTC fund appear to be slowing, so are the overall flows for the spot Bitcoin ETFs since peaking at a net daily inflow of $1.05 billion on March 12, as bitcoin approached its latest all-time high of $73,836, according to The Block’s data dashboard .

March was also a banner month for the spot Bitcoin ETFs by trading volume , nearly tripling February’s total to top $111 billion. However, after reaching a record $9.9 billion on March 5, as bitcoin first broke past its prior cycle peak of around $69,000, daily volume has declined, alongside the recent slide in bitcoin’s price.