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The main cryptocurrency driving factors in April

April will be an important month for cryptocurrencies.

The highly anticipated Bitcoin halving is about to happen.

Not only that, but several well-known projects will also release their tokens or undergo major upgrades.

Here are four important cryptocurrency events to watch for next month:

1. Bitcoin Halving

The next Bitcoin halving is expected to occur in about 22 days.

Once implemented, it will reduce the circulating supply of new bitcoins by 50%.

However, it is worth noting that the current inflation rate of Bitcoin is already very low (less than 2% per year).

Therefore, from a fundamental perspective, I don't think the halving is a big deal. But from a psychological perspective, it may be different.

Many people know that historically, Bitcoin has performed very well in the months following each halving event. Therefore, they are likely to quickly buy cryptocurrencies again, hoping that history will repeat itself.

In addition, the Hong Kong Securities and Futures Commission is expected to approve the first spot Bitcoin ETF in Hong Kong in the second quarter.

All events have paved the way for Bitcoin.

2. Stacks Nakamoto Upgrade

Stacks is a second-layer solution for Bitcoin that makes smart contracts and dApps more powerful.

The Nakamoto upgrade for Stacks has been in development for a long time and seems to be finally launching on the mainnet next month.

The Nakamoto upgrade will:

• Allow the use of sBTC (an asset pegged to BTC) in DeFi on Stacks
• Reduce the network block time from 10 minutes to a few seconds
• Increase the scalability of the Stack L2

This upgrade may trigger a new wave of Bitcoin L2.

The Stacks token $STX can also be seen as a beta version of Bitcoin.

Stacks is the most popular project built on top of Bitcoin to date.

3. Solana Airdrop Season

Last year, Jito's announcement of a large-scale airdrop revived the Solana ecosystem. In April, several other well-known Solana dApps will launch tokens:

• Parcl
• Drift Protocol
• Kamino

All of these protocols will conduct airdrops.

This list only includes officially confirmed airdrops, so there may actually be some unannounced ones.

Large-scale airdrops can have a huge positive impact on the ecosystem as they inject more liquidity into it. For example, after the announcement of $JTO in November 2023, the situation with $SOL:

Considering that the market value of SOL has now exceeded 80 billion US dollars, I think it is unrealistic to expect SOL to double or triple in the short term.

However, Solana is likely to benefit greatly from these ecosystem airdrops, just as it has in the past.

4. Eigenlayer Mainnet Launch + Potential Token Listing

The Eigenlayer token may go live in late April or early May.

There are several reasons for this:

• The Eigenlayer mainnet is confirmed to go live in the coming weeks (this may be the best time for Eigenlayer to also launch its token)
• Many early investors have indicated that the token will be released in late April or early May
• Additionally, April may also be the month when the first Eigenlayer Active Validation Service (AVS) goes live. Altlayer is a popular example of an AVS, which is a decentralized protocol for Rollup.

The protocol for "renting" security from Ethereum through Eigenlayer is called AVS (can be shard-level, sidechain, L2, etc.)

Many AVS projects may airdrop tokens to Eigenlayer users, just as Altlayer did when it launched its token a few months ago.

According to the Etherfi team, 8 AVS will soon start distributing points or token rewards to EtherFi's ETH liquidity re-staking token holders.

On-chain Alpha

In the past 6 months, 86 billion US dollars of institutional funds have flowed into Bitcoin.

As shown in the above figure, since the launch of the spot Bitcoin ETF, institutional inflows into Bitcoin have increased sharply.

This reminds me, if a spot Ethereum ETF is also approved later this year, what will be the institutional adoption situation for Ethereum.

It is becoming increasingly clear that institutions are beginning to realize the indispensability of cryptocurrencies.

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