APRIL 23
The Halving
The Supply Shock Built Into Bitcoin
The Signal
Every halving cuts new bitcoin supply in half. When demand holds or grows, that creates upward pressure on a fixed asset.
The Reading
Imagine a shop that restocks the same product every day. Then tomorrow’s delivery is cut in half. The customers do not have to disappear. Only the new supply changes.That is the idea behind Bitcoin’s halving. Every 210,000 blocks, roughly every four years, the block subsidy paid to miners is cut in half. It began at 50 bitcoin, then 25, 12.5, 6.25 and in 2026 it is 3.125, every four years it will continue to reduce.
For miners, that matters immediately. The same machines and energy now compete for half as many newly created bitcoin. All else equal, the subsidy-based cost of producing each bitcoin roughly doubles. That pressure sorts the mining industry. Less efficient machines may switch off. Stronger miners search for cheaper energy, better machines and greater efficiency. Bitcoin’s difficulty adjustment helps the network rebalance as mining power changes.
Price is not mathematically forced to double. Energy prices, mining efficiency, transaction fees, difficulty and demand all matter. One fact does not change: fewer new bitcoin are entering the market. If demand stays steady while new supply falls, the pressure on price points upward. If demand grows, that pressure becomes stronger.
History is striking. Bitcoin traded around $12 at the 2012 halving, about $650 in 2016, about $8,600 in 2020 and about $64,000 in 2024. That does not guarantee the future. But every halving so far has tightened new supply while Bitcoin adoption has grown.
This is part of what Bitcoiners call “number go up technology”: supply keeps getting harder while demand is free to grow. Confidence comes from the rule itself. Every 210,000 blocks, new supply is cut again, on schedule.
First Principles
The halving cuts new bitcoin issuance in half every 210,000 blocks.
It immediately tightens miner economics and rewards efficiency.
Lower new supply can create upward price pressure when demand holds or grows.
Today’s Challenge
Take eight coins and place them in a row.
Now remove half. You have four. Remove half again. You have two. Remove half again. You have one.
The demand for the coins did not change. Only the new supply kept shrinking. That is the halving.
Tomorrow’s Signal
Predictable Supply