Bitcoin: The Halving and Why It Matters

In May of 2020, bitcoin is expected to undergo its third "halving," a programmed supply reduction that has in the past coincided with a strong run-up in the bitcoin price. In this paper, we explain what the bitcoin halving is, why it matters and why the market is so focused on this event. We attempt to reconcile the various models and theses around the potential bitcoin price reaction as the adjustment approaches, and look at metrics that will shed light on the technological impact. We finish with some input from miners themselves, who lend insight and perspective to the possible consequences of the protocol change.