With Ethereum's Constantinople upgrade due for 2019, many are predicting positive things for the future of the third-largest crypto. Analyst and commentator Alex Kruger believes that the forecast is "decidedly bullish".
One of the longest-awaited network updates in the crypto space, Constantinople has also been referred to as Ethereum 2.0. Among a number of important modifications, one big one is that the new protocol will change the block mining rewards from 3 to 2. This is what could have a significant impact on the ETH price.
According to Kruger, the new mining rewards will make ETH bearish in the short-term, but bullish over a longer period of time. He analyzed the future profitability of mining ETH, and worked out his predictions in a Tweet thread.
2/ On Jan 16th Ethereum would activate the Constantinople Upgrade, reducing block rewards from 3 to 2. That would increase a $67 breakeven to $101, sending more marginal miners out of business (which is short term bearish— Alex Krüger 🇦🇷 (@Crypto_Macro) December 18, 2018
as such miners liquidate inventories in the process).
3/ The increase in breakevens is not bullish on itself. Price does not follow breakevens, and in crypto breakevens do not represent a floor. However, once mining is past the initial (painful) adjustment period, less mining supply mined by fewer miners will be decidedly bullish.— Alex Krüger 🇦🇷 (@Crypto_Macro) December 18, 2018
Marginal miners = Most inneficient miners.— Alex Krüger 🇦🇷 (@Crypto_Macro) December 18, 2018
Costs and breakevens vary greatly among miners. pic.twitter.com/fLFZWaCNyI