How Does the Halving Event Impact the Profitability of Mining and the Network’s Security Budget?

The halving event is a programmed reduction in the block reward, cutting the newly issued cryptocurrency by half. This immediately reduces miner profitability unless the cryptocurrency's market price rises proportionally.

It forces less efficient miners offline. While it reduces the immediate security budget (the reward), the resulting scarcity is intended to drive up the price, potentially increasing the total fiat value of the reward and maintaining the long-term security budget.