With about a week left until the fourth Bitcoin halving, which will reduce the block reward to 3.125 BTC, whales have been purchasing significant amounts of BTC over the past week as the Bitcoin (BTC) halving approaches. The growing demand from whales indicates bullish sentiment in the market, as according to data from crypto analytics company CryptoQuant, the growth in demand from Bitcoin whales has never been stronger. Thus, demand from “regular holders” for the first time exceeded the market supply of new bitcoins. This indicates that the number of new Bitcoins produced through mining is not enough to meet the demand of cryptocurrency investors, and the shortage will only increase after the halving. Increasing demand from BTC whales, added to the Bitcoin spot inflow, will put upward pressure on the price of the leading cryptocurrency. In the medium to long term, this trend has the potential to further increase the value of Bitcoin.
The Bitcoin halving is a major event for the crypto ecosystem and is often preceded and followed by euphoric price action. Historically, every bull run began several months before the halving in anticipation of a reduction in BTC supply. After the halving, the price of BTC increases many times due to a decrease in supply and an increase in the imbalance of supply and demand. In addition to directly affecting supply, the BTC halving will also impact miners, who are responsible for validating transactions and adding new blocks to the blockchain. Each halving cuts the amount of BTC miners earn by half, increasing the cost of mining new BTC. Therefore, BTC prices must rise to a certain level for miners to continue operating profitably. Currently, the average cost to mine one Bitcoin is around $49,000, which is profitable at the current trading price of around $70,000. However, for miners to continue operating profitably, the price of BTC after the halving must exceed $80,000.
The whale accumulation phase is a bullish sign for the cryptocurrency market, indicating that large BTC holders are moving their assets to cold wallets in anticipation of rising prices.
In other ecosystems, they also strive for positivity. The Ethereum Pectra update, scheduled for late 2024 or early 2025, will bring with it many additional features for crypto wallets and improvements to their user experience (UX). As a reminder, Ethereum Improvement Proposal (EIP) 3074 has been approved for inclusion in the next update, which allows regular crypto wallets to function as smart contracts. One of the features of the EIP-3074 provides standard external accounts (EOA), regular wallets such as the MetaMask wallet, smart contract capabilities. This allows for features such as transaction aggregation so users only need to sign once, and sponsored transactions where a wallet can delegate funds for others to use, similar to the account abstraction that was introduced in ERC-4337. Other planned features of the EIP-3074 include a social recovery feature that eliminates the need for a typical 12-24 word seed phrase, i.e. EIP turns wallets into smart contracts by adding two new operating instructions – AUTH and AUTHCALL. AUTH verifies signatures and actions. AUTHCALL then “calls the target contract(s) with the sender’s address as the caller” rather than the sender of the message. Or, in other words, it will assign the user as the caller, and not the contract making the call. Another key benefit of EIP-3074 is that users will not need Ether (ETH) in their wallet to send transactions, as the entity behind the originator contract can pay for it up front. This will supposedly also allow multiple actions to be performed in a single transaction.
The planned Pectra update comes after Ethereum developers released the Dencun update last month, which contributed to a significant reduction in transaction fees on Layer 2. Ethereum co-founder Vitalik Buterin also shared in early April the next steps for the next Purge update, which will remove old and redundant history network to make it easier.
