Why don't I think that? Because the price right now is better than it's been in months and there's still profit to be made. Once the block reward halves, the payout from mining will be cut in half while the costs will remain about the same, but the production cost of those 12.5 bitcoins won't have much effect on the perceived value of the other 16 million bitcoins already available. So no, we don't expect a drop in difficulty right now because approximately everyone is still actually making money from mining. "Using the same argument" doesn't apply to anything that happens before the halving unless the price of BTC were to halve overnight. When that did occur (or nearly so, second week of January) what happened to the diff? Pretty sure it was negative two changes in a row while people turned off gear that wasn't profitable anymore. And then the price went back up, and so did the diff. The diff increases on average if mining bitcoins is profitable on average. The diff decreases on average when profitability decreases. When the block halving occurs, the total supply of coins won't be changed substantially but the dollar value of solving a block will be halved so profitability will take a huge hit, masses of gear will be turned off and the diff will drop. Unless somehow the price also goes up quite a bit, which is not likely since, as mentioned, the total supply of coins won't be changed substantially so the supply/demand curves won't move very far. Unless bitcoin's perceived utility increases, the price will not.