Bitcoin ETF decision is imminent, Ethereum's Cancun upgrade will be activated, and Bitcoin's quadrennial block reward halving is approaching. These three major events will kick off the Web3 industry in 2024.
The approval of the Bitcoin ETF will provide new guarantees for the liquidity and investment convenience of Bitcoin, thereby attracting more investors into the Bitcoin market. The Cancun upgrade of Ethereum will significantly improve its scalability, providing a more powerful underlying infrastructure for the development of Web3 applications. The Bitcoin halving will lead to a reduction in Bitcoin's supply, theoretically pushing up its price.
Industry insiders predict that these three events will be key turning points for the cryptocurrency market from bearish to bullish.
Bitcoin ETF
On December 29, 2023, Reuters released a major news stating that the U.S. Securities and Exchange Commission (SEC) may inform applicants on January 2nd or 3rd (U.S. time) whether they are allowed to launch a physically-backed Bitcoin ETF, giving them time to prepare for the launch on January 10th.
As of now, 13 issuers have submitted applications for Bitcoin physically-backed ETFs to the SEC, including Grayscale, BlackRock, Fidelity, VanEck, ARK+21Shares, and Bitwise. These companies intend to offer physically-backed Bitcoin ETFs on exchanges such as Nasdaq, Cboe BZX, and NYSE Arca.
On December 29th, several companies submitted amendments, and on December 21st, several applicants participated in a rare joint conference call with the SEC.
By January 10th at the latest, the SEC will have to respond to the application for the physically-backed Bitcoin ETF. It is widely believed in the industry that the likelihood of the ETF being approved is very high.
Investment research firm Fundstrat predicts that once the physically-backed Bitcoin ETF is approved, the price of Bitcoin will soar more than five times from its current level, surpassing $150,000, and even reaching $180,000. It is expected that over $2.4 billion will flow into the newly approved U.S. physically-backed Bitcoin ETF market in the first quarter of 2024.
Ethereum Cancun Upgrade
For a long time, Ethereum has not held a dominant position in the fierce competition with other blockchains. Its design is relatively complex, and the upgrade process requires a long preparation period. Compared to Bitcoin, Ethereum lacks advantages in terms of assets, and compared to its competitors, the Ethereum network is prone to congestion due to sudden hot applications, leading to transaction delays and high fees, while its scalability is also limited.
However, it is predicted that the Cancun upgrade scheduled for the first quarter of this year will bring significant performance improvements to the Ethereum network. By introducing sharding technology, the Cancun upgrade will enable the Ethereum network to process multiple shards simultaneously, significantly increasing transaction throughput. This will enable the Ethereum network to meet the growing user demand and support more decentralized applications and transactions. In addition, the Cancun upgrade will also reduce transaction fees on the Ethereum network.
Ethereum co-founder Vitalik Buterin recently shared an updated roadmap, demonstrating a commitment to continuous improvement and innovation.
One key update includes the implementation of single slot finality (SSF) in the post-merge proof-of-stake (PoS) improvement. SSF is expected to address many of the flaws in Ethereum's current PoS design, resulting in faster and more secure transactions.
Developers have also made significant progress in other areas such as Surge, including advancements in EIP-4844 and rollups. These improvements enhance Ethereum's scalability and efficiency, which are crucial for its long-term success.
Buterin's roadmap also addresses the challenges of economic centralization in PoS through initiatives such as Scourge. The redesign focuses on addressing maximum extractable value (MEV) and general equity pool issues, which are crucial for maintaining the integrity and decentralization of the network.
Analysts are optimistic about Ethereum's future, with some predicting that the price of Ethereum could exceed $5,000 after the Cancun upgrade, and Layer 2 will dominate the Ethereum ecosystem, bringing significant progress to underlying decentralized applications on various chains.
Bitcoin Block Reward Halving
It is expected that the Bitcoin block reward halving will take place in April 2024, further reducing the supply of Bitcoin and theoretically driving up its price.
The Bitcoin halving is a scheduled event, where the block reward for mining new Bitcoins is halved. The initial reward (2012) was 50 BTC, reduced to 25 BTC in 2016, and halved to 12.5 BTC in 2020. The next halving is expected to occur in April 2024, at which point the mining reward per block will decrease to 6.25 Bitcoins.
This year, protocols led by Ordinals have ushered in a new trend in the Bitcoin ecosystem, gradually changing the face of Bitcoin. In particular, the new Bitcoin inscription experiment based on the Ordinals protocol has begun to introduce some new variables to Bitcoin, which has been developing towards the "payment currency" attribute for over a decade, and even showing preliminary signs of a similar ecosystem to Ethereum.
The Bitcoin network has not only seen the emergence of NFTs but also the issuance of homogeneous token assets through protocols. However, at the same time, controversies about "innovations" such as BRC20 continue to spark intense debates. Following the inscription, the emergence and development of the Bitcoin Layer 2 network may alleviate the pressure on the Bitcoin mainnet brought by the issuance of new assets.
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