Bitcoin has entered the latter half of its halving cycle following the halving event in April 2024, with the next supply reduction expected to occur in April 2028 at a block height of 1,050,000. There are still over 105,000 blocks remaining in the current cycle, and the network has passed what analysts refer to as the midpoint of the fifth epoch.
Halving Effects Shape Supply and Market Dynamics
The Bitcoin network undergoes a halving every 210,000 blocks, reducing miner rewards by half each time, which directly impacts the rate at which new coins are generated on the network. Currently, the block reward is 3.125 BTC, but it will drop to approximately 1.562 BTC by the time of the 2028 halving, reducing the daily issuance from 450 BTC to 225 BTC.
This protocol-based supply reduction is crucial to Bitcoin's capped supply of 21 million coins, which has supported its scarcity narrative since its inception. After halvings in 2012, 2016, 2020, and 2024, significant price expansions have occurred as the decrease in new coin inflow met sustained demand, driving prices higher.
However, the current cycle shows more restrained growth. Since April 2024, Bitcoin's value has risen by about 15%, climbing from nearly $64,000 to around $74,000. The asset reached a peak of approximately $126,000 in October 2025 but fell back to around $60,000 by February, indicating that the price increase is less pronounced compared to earlier cycles.
A key factor in this moderate trend is the increased market capitalization of Bitcoin. As the network matures and adoption expands, the scale of funding required to drive the market has grown, leading to reduced volatility and a slower pace of price increases.
Miners Face New Realities as AI Transition Accelerates
The current environment presents new challenges for miners, as their core mining profits are squeezed by reduced rewards while energy and operational costs remain high. With the decrease in rewards from newly generated coins, operators are seeking alternative revenue streams to maintain profitability.
Many mining companies are turning their attention to artificial intelligence. By reallocating resources to power-hungry data center operations, miners are leveraging existing infrastructure (such as energy supply, cooling systems, and facilities) to support AI workloads and ensure a more stable source of income.
Companies like TeraWulf and Core Scientific have taken significant steps in this transition, completing billion-dollar agreements to host AI computing infrastructure. Resources previously used for purchasing and holding Bitcoin are being redirected to expand the capacity of data centers for high-demand AI applications.
This shift highlights the broadening of traditional Bitcoin miner business models, as rapidly changing market conditions and halving rewards prompt them to adopt more diversified strategies. Integrating AI infrastructure helps offset losses in mining revenue and allows miners to benefit from the booming demand in a parallel technology sector.