Recent discussions on Twitter have been buzzing with rumors suggesting that Ethereum might revert to a Proof-of-Work (PoW) mining mechanism. This speculation has coincided with notable activity from several large-scale investors, often referred to as "whales," who have begun accumulating significant amounts of Ethereum (ETH) and moving their holdings from exchanges back into private wallets. On Friday, April 12, Ethereum’s price climbed to $3,511, following a broader market rebound led by Bitcoin.
Understanding the Proof-of-Work Rumors
The rumors appear to have originated from a speech delivered by Ethereum co-founder Vitalik Buterin at the Hong Kong Web3 Carnival earlier this week. Buterin addressed current challenges within the Ethereum network, particularly focusing on the efficiency of zero-knowledge proofs (ZK-SNARKs), which are essential for Layer 2 validation.
In the existing Proof-of-Stake (PoS) consensus layer, generating a ZK-SNARK proof takes approximately 20 minutes—a significant delay compared to Ethereum’s block time of 12-13 seconds. Buterin proposed a hybrid model involving "parallelization and aggregation trees," which would utilize additional hardware to accelerate proof generation. He also mentioned potential efficiency improvements through SNARK algorithms and specialized ASIC devices.
This technical discussion sparked interpretations within the crypto community, with some influencers suggesting a full return to PoW. Prominent crypto commentator Bitjin argued that a PoW model could help Ethereum achieve greater decentralization and avoid regulatory pressure from entities like the U.S. Securities and Exchange Commission (SEC).
However, technical analysts from outlets like BlockTempo have clarified that Buterin’s proposal is not equivalent to reverting to PoW mining. Instead, it aims to optimize zero-knowledge proof generation through hardware acceleration—a process fundamentally different from traditional mining.
Whale Movements: Accumulation and Strategic Shifts
Data from on-chain analytics platforms such as Spot On Chain and Lookonchain reveals intriguing behavior among Ethereum whales. While one whale, identified as Ox347, deposited 9,000 ETH into Binance to realize profits, the same entity continues to hold 29,738 ETH worth approximately $106 million.
In contrast, other whales are accumulating. Whale 0x4359 purchased 10,309 ETH during a recent dip and withdrew an additional 3,092 ETH from Binance, bringing its three-day total withdrawals to 24,044 ETH. Another whale, 0xACc7, withdrew 22,251 ETH from exchanges, accumulating 33,925 ETH over three days—valued at around $122 million.
Some community members speculate that these movements are linked to the growing trend of restaking within decentralized finance (DeFi), particularly following the launch of the EigenLayer mainnet. Lookonchain data supports this, showing whales moving ETH into platforms like Pendle and Bedrock.
Regulatory Context and Market Impact
The regulatory environment remains a significant factor influencing Ethereum’s market dynamics. The SEC recently issued a Wells notice to Uniswap, the largest decentralized exchange on Ethereum, alleging that it operates as an unregistered securities exchange. This action could have broad implications for the DeFi ecosystem, given that Ethereum supports around 80% of all DeFi applications.
Moreover, the SEC has sent subpoenas to three companies associated with the Ethereum Foundation, leading to speculation that the agency may be attempting to classify Ethereum as a security. Such regulatory uncertainty adds complexity to Ethereum’s short-term price movements.
Ethereum Technical Analysis: Consolidation Phase
According to FXStreet analyst Michael Ebiekutan, Ethereum has been trading within a consolidation pattern since recovering from a correction that began after it hit a high of $4,094 on March 11. Although traders anticipated a bounce toward this level when ETH approached $3,730, the price retraced instead.
The ongoing sideways movement suggests market indecision, with traders hesitant to commit to long or short positions. This sentiment is reflected in the alternating increase between long and short liquidations over the past two weeks.
Key support levels to watch are $3,210 and $3,056. A break below these could signal the beginning of a bearish trend. Meanwhile, major catalysts such as the Bitcoin halving and significant SEC rulings are likely to determine Ethereum’s next directional move.
Bitcoin Correlation and Halving Impact
Ethereum continues to show strong correlation with Bitcoin. Like other major altcoins, Ethereum’s price action has largely mirrored Bitcoin’s since the beginning of the year. With the Bitcoin halving approximately eight days away, this event is expected to influence Ethereum’s short-term trajectory.
Analysts at CMTrade note that Bitcoin’s RSI is above the neutral zone of 50, and the MACD, though negative, is above the signal line. For further upward momentum, the MACD would need to cross above zero.
The pivot point is set at $69,050, with an upside target of $73,390. Alternatively, a drop below $69,050 could lead to tests of $67,460 and $66,510.
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Frequently Asked Questions
What is Proof-of-Work (PoW)?
Proof-of-Work is a consensus mechanism used in blockchain networks where miners solve complex mathematical problems to validate transactions and create new blocks. It is known for its high security but also for being energy-intensive.
Why are whales accumulating Ethereum?
Large investors may be accumulating ETH due to speculation about network upgrades, potential regulatory clarity, or participation in emerging DeFi trends such as restaking. Some are also moving funds off exchanges to secure their holdings in private wallets.
Could Ethereum really revert to PoW?
Based on current technical discussions, a full return to PoW is unlikely. Vitalik Buterin’s proposals focus on optimizing zero-knowledge proof generation using hardware, which is different from traditional mining.
How does SEC regulation affect Ethereum?
If the SEC classifies Ethereum as a security, it could impose stricter regulations on trading, staking, and DeFi applications built on Ethereum. This might impact its decentralization and market valuation.
What is the significance of the Bitcoin halving for Ethereum?
Since Ethereum often correlates with Bitcoin’s price movements, the halving—which reduces Bitcoin’s supply issuance—could influence overall market sentiment and liquidity, indirectly affecting Ethereum’s price.
Where can I track whale movements?
On-chain analytics platforms like Lookonchain, Spot On Chain, and Etherscan provide real-time data on large transactions and wallet activities, offering insights into whale behavior.