How does Bitcoin halving work, and what effects does it have?

Bitcoin halving is an event that happens every four years, where the reward given to miners for adding new blocks to the blockchain is cut in half. This means fewer new bitcoins enter circulation. The main purpose is to control inflation and ensure bitcoin’s total supply stays limited at 21 million coins. Halving events reduce the rate at which new bitcoins are created, making the asset more scarce over time. Historically, halving has often been followed by a rise in bitcoin’s price, as lower supply meets steady or rising demand. However, it also increases the cost for miners, which can affect smaller players. Investors watch halving events closely, as they often impact market trends, public interest, and the overall dynamics of the cryptocurrency space.