In the Bitcoin network, user transactions are grouped in blocks and recorded to a digital public ledger called what is happening with bitcoin price blockchain. The amount of bitcoins rewarded for each block decreases with time: it is halved every 4 years. This event, the moment when the mining reward is divided by 2, is commonly called “Bitcoin halving”. Other denominations are used: “reward drop”, “reward halving”, or simply “the halving” or “the Halvening” which is a popular meme among bitcoiners.
When Bitcoin was created in 2009, the initial reward was 50 bitcoins. In november 2012, it dropped to 25btc after the first halving. The second halving will take place in July 2016, decreasing the reward to 12. WHAT IS THE IMPACT ON BITCOIN PRICE? As any freely traded asset, Bitcoin price depends solely on demand and supply.
The evolution of bitcoins supply is hard coded and is known to everyone, so it all depends on the evolution of demand. Bitcoin being a very young currency with much room to grow in use and value, I would personally bet on a price increase. Note that other examples of halvings are available for comparison. The first Bitcoin halving occurred on the 28th of November 2012. More recently, the Litecoin, a Bitcoin clone, passed its first halving on August 25th, 2015.