To fully understand halving, we need to look at the foundations of the Bitcoin blockchain.

The blockchain is a distributed ledger that records all transactions on a network of thousands of computers worldwide. This ledger is both public and immutable, enabling bitcoin's transparency and security, without the need for a central authority.

Another important point: Bitcoin is a proof-of-work network. This is why it relies on miners to validate transactions and include them in blocks. Mining essentially consists of adding transactions to this ledger, using computers and software to solve complex cryptographic problems. When a miner succeeds in solving one of these problems, he or she adds a "block" of transactions to the blockchain and is rewarded with a predetermined amount of bitcoins.

When Bitcoin was launched, miners were rewarded with 50 bitcoins for each block they mined. However, the Bitcoin protocol stipulates that every 210,000 blocks, the miners' reward is halved, a process that takes roughly 4 years.

During the first halving, in November 2012, the reward per block fell from 50 to 25 bitcoins. The second and third halving took place in July 2016 and May 2020, with the rewards dropping to 12.5 and 6.25 bitcoins respectively. This time, the block reward will drop from 6.25 BTC to 3.125 BTC.

Source : River Learn

The importance of halving lies mainly in the scarcity effect it gives bitcoin. To understand this, let's look at bitcoin's supply and its deflationary model.
The total supply of bitcoins is limited to 21 million tokens. At the time of writing, over 93.7% of this supply is already in circulation, for a total of around 19.7 million BTC. The last
bitcoin is expected to be mined by 2140... Yes, you read that right, another 116 years until the final bitcoin is mined.

Given that only three halving’s have taken place in bitcoin's history, past performance cannot be considered statistically significant. However, it's worth recalling Bitcoin's behavior during previous "halving" periods.

After the first Halving in 2012, bitcoin's price soared from around $12 to over $1,000 in December 2013. The second Halving, in 2016, also preceded a remarkable bull run, with prices rising from around $650 to over $19,000 in December 2017. By the third Halving, in May 2020, bitcoin had fallen back to around $8,000, before reaching new all-time highs above $60,000 in early 2021.

Halving therefore usually has a very positive effect on the price, particularly in the 6 to 9 months following the day of halving (see chart below).

 Source : Coin Metrics

Past performance is not indicative of future performance. Meaning, there's no certainty that the price of bitcoin will rise as a result of halving. Some also point to the fact that post-halving performance has declined over time: after the halvings of 2012, 2016 and 2020, the price of bitcoin

increased 93-fold, 30-fold and 8-fold, respectively, between the day of the halving and the peak of the cycle.

Source : Coin Metrics

However, this trend could be reversed this year, not because of a supply shock, but rather because of a new demand shock. With the advent of bitcoin spot ETFs, demand for Bitcoin is stronger than ever, and far outstrips the quantity of bitcoin produced by miners. In March, demand from bitcoin spot ETFs alone amounted to 66,008 tokens, while miners produced just 28,513 tokens over the same period (see chart below). After April 19, this daily production by bitcoin miners will be halved, creating an even greater supply-demand imbalance.

Miners, who play an essential role in Bitcoin's operational infrastructure, are perhaps the hardest hit by this halving. Clearly, if the reward for mining decreases, miners' incomes also decrease, assuming all other things remain equal. This can reduce the profitability of mining operations, particularly those with higher operating costs. It is already estimated that, after halving, average operating costs will exceed $80,000, meaning that the BTC price must trade above this amount if miners are to continue to operate profitably.

In a sector as innovative as crypto-currency mining, players' adaptability and flexibility are crucial to survival, and miners have already begun to implement several strategies due to the reduction in the reward mechanism. One popular strategy is to relocate to areas with lower electricity costs, as the mining process is very energy intensive. Another similar approach is to move to regions with a more favorable climate to reduce cooling costs, as large amounts of electricity are required not only for the mining itself, but also to prevent the hardware from overheating. Other miners have decided to join mining pools to group computing resources and share rewards, thus mitigating the risk of fluctuating revenues.