Yesterday morning, the two chambers of Arizona passed the Bitcoin reserve bill, and now we are waiting for the governor's signature. If signed, this will make Arizona the first state in the U.S. to hold Bitcoin reserves. With a 10% investment share, around 7.8 billion dollars can potentially be invested in the Bitcoin market.
Currently, the bill is with the governor, who has five working days to decide whether to sign or veto it. Following that, the U.S. GDP data will be announced tomorrow, which will definitely cause significant fluctuations. Recently, ETFs have been flowing in, and market sentiment has improved slightly, but Bitcoin is still fluctuating within a large range.
Let's see which event can stimulate the market to break through this range. Bitcoin at 100,000 is a psychological barrier; at least from the perspective of most altcoin sentiment and whale operations, this is the case. After Bitcoin reaches 100,000, its characteristics will be closer to gold. I believe the altcoin explosion will also occur after 100,000. The breakthrough of this psychological barrier will definitely lead to FOMO capital entering the market, and the same goes for market makers, who will look for good depth to facilitate liquidity exit in the future.
Why did altcoins go wild in March and November 2024? Because Bitcoin broke through its historical high and surpassed the psychological barriers that people had for two years, leading to a flourishing market. In contrast, this year, whether in terms of liquidity or capital outflow from altcoins, it has not been much different from a deep bear market. Therefore, the market needs not only to open the floodgates but also to break through the literal barriers to instill confidence in the market—confidence is more precious than gold.
Today, I want to focus on Ethereum because on May 7, Ethereum will undergo the Prague upgrade. It has been a year and a half since the last major good news like Bitcoin ETF and Ethereum ETF, and now there is finally some significant practical good news coming.
First, let's discuss why institutions are also paying attention to this upgrade:
The most critical improvement is that it significantly reduces operational costs for institutions, which can attract more institutional participation. It also greatly increases staking security. Previously, each account could only stake a maximum of 32 coins, but this upgrade raises it to 2048 coins, an increase of 64 times. This essentially maximizes the advantage of the savings rules; before, one had to split across dozens of accounts to meet the upgraded data requirements, but now a single account suffices.
This is a benefit for institutions. The SEC has previously refused to approve the staking function for Ethereum ETFs because the process was too cumbersome. Now the SEC has no excuse to withhold ETF approval. Other institutions will definitely be willing to buy ETFs seeing how convenient it is to deposit and withdraw. Large institutions come with real money; as more people buy, the circulating coins in the market will decrease, which will naturally push Ethereum's price up. Additionally, the optimization has reduced Layer 2 data publishing costs, decreased user transaction fees, lightened node burdens, and increased decentralization, laying the foundation for future dApp ecosystems and attracting more project parties and users.
In other words, after this upgrade, not only will the staking data increase, but the Ethereum ecosystem is expected to see many new stars as well. Recently, Ethereum's price has been continuously declining, and most voices in the market suggest that Ethereum is not going to take the second position in the altcoin circle. Therefore, most retail investors are indifferent to Ethereum's upgrade because price determines everything. However, retail investors always like to find reasons when prices rise and blame bad news when prices fall.
Once Ethereum rises, there will be a plethora of reasons for the surge due to the Ethereum upgrade. This also highlights the difference between retail investors and institutions. Retail investors focus on the present and buy whoever has a strong price, while institutions invest in the future, analyzing various aspects and looking for buying points on the charts, then waiting for value to return.
