diff --git a/package/expo-package/src/optionalDependencies/pickImage.ts b/package/expo-package/src/optionalDependencies/pickImage.ts
index 9d2ce11533..fa6b98d034 100644
--- a/package/expo-package/src/optionalDependencies/pickImage.ts
+++ b/package/expo-package/src/optionalDependencies/pickImage.ts
@@ -53,8 +53,10 @@ export const pickImage = ImagePicker
             return { cancelled: true };
           }
         }
+        return { cancelled: true };
       } catch (error) {
         console.log('Error while picking image', error);
+        return { cancelled: true };
       }
     }
   : null;
diff --git a/package/native-package/src/optionalDependencies/pickImage.ts b/package/native-package/src/optionalDependencies/pickImage.ts
index 574c1538e9..5ab35fcd76 100644
--- a/package/native-package/src/optionalDependencies/pickImage.ts
+++ b/package/native-package/src/optionalDependencies/pickImage.ts
@@ -35,6 +35,7 @@ export const pickImage = ImagePicker
         }
       } catch (error) {
         console.log('Error picking image: ', error);
+        return { cancelled: true };
       }
     }
   : null;
diff --git a/package/src/components/ChannelPreview/ChannelPreview.tsx b/package/src/components/ChannelPreview/ChannelPreview.tsx
index 7eec3e32c7..fb8edbbed9 100644
--- a/package/src/components/ChannelPreview/ChannelPreview.tsx
+++ b/package/src/components/ChannelPreview/ChannelPreview.tsx
@@ -3,7 +3,6 @@ import React from 'react';
 import type { Channel } from 'stream-chat';
 
 import { useChannelPreviewData } from './hooks/useChannelPreviewData';
-import { useLatestMessagePreview } from './hooks/useLatestMessagePreview';
 
 import {
   ChannelsContextValue,
@@ -31,15 +30,16 @@ export const ChannelPreview = <
   const { channel, client: propClient, forceUpdate: propForceUpdate, Preview: propPreview } = props;
 
   const { client: contextClient } = useChatContext<StreamChatGenerics>();
-  const { forceUpdate: contextForceUpdate, Preview: contextPreview } =
-    useChannelsContext<StreamChatGenerics>();
+  const { Preview: contextPreview } = useChannelsContext<StreamChatGenerics>();
 
   const client = propClient || contextClient;
-  const forceUpdate = propForceUpdate || contextForceUpdate;
   const Preview = propPreview || contextPreview;
 
-  const { lastMessage, muted, unread } = useChannelPreviewData(channel, client, forceUpdate);
-  const latestMessagePreview = useLatestMessagePreview(channel, forceUpdate, lastMessage);
+  const { latestMessagePreview, muted, unread } = useChannelPreviewData(
+    channel,
+    client,
+    propForceUpdate,
+  );
 
   return (
     <Preview
diff --git a/package/src/components/ChannelPreview/__tests__/ChannelPreview.test.tsx b/package/src/components/ChannelPreview/__tests__/ChannelPreview.test.tsx
index e9ad31c93f..99e5329b2c 100644
--- a/package/src/components/ChannelPreview/__tests__/ChannelPreview.test.tsx
+++ b/package/src/components/ChannelPreview/__tests__/ChannelPreview.test.tsx
@@ -69,6 +69,15 @@ describe('ChannelPreview', () => {
     );
   };
 
+  const generateChannelWrapper = (overrides: Record<string, unknown>) =>
+    generateChannel({
+      countUnread: jest.fn().mockReturnValue(0),
+      initialized: true,
+      lastMessage: jest.fn().mockReturnValue(generateMessage()),
+      muteStatus: jest.fn().mockReturnValue({ muted: false }),
+      ...overrides,
+    });
+
   const useInitializeChannel = async (c: GetOrCreateChannelApiParams) => {
     useMockedApis(chatClient, [getOrCreateChannelApi(c)]);
 
@@ -89,9 +98,8 @@ describe('ChannelPreview', () => {
     it("should not update the unread count if the event's cid does not match the channel's cid", async () => {
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const c = generateChannel({
+      const c = generateChannelWrapper({
         countUnread: jest.fn().mockReturnValue(10),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
         on: channelOnMock,
       });
 
@@ -117,9 +125,8 @@ describe('ChannelPreview', () => {
     it('should update the unread count to 0', async () => {
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const c = generateChannel({
+      const c = generateChannelWrapper({
         countUnread: jest.fn().mockReturnValue(10),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
         on: channelOnMock,
       });
 
@@ -147,9 +154,7 @@ describe('ChannelPreview', () => {
     it("should not update the unread count if the event's cid is undefined", async () => {
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const c = generateChannel({
-        countUnread: jest.fn().mockReturnValue(0),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
+      const c = generateChannelWrapper({
         on: channelOnMock,
       });
 
@@ -182,9 +187,7 @@ describe('ChannelPreview', () => {
     it("should not update the unread count if the event's cid does not match the channel's cid", async () => {
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const c = generateChannel({
-        countUnread: jest.fn().mockReturnValue(0),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
+      const c = generateChannelWrapper({
         on: channelOnMock,
       });
 
@@ -217,9 +220,7 @@ describe('ChannelPreview', () => {
     it("should not update the unread count if the event's user id does not match the client's user id", async () => {
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const c = generateChannel({
-        countUnread: jest.fn().mockReturnValue(0),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
+      const c = generateChannelWrapper({
         on: channelOnMock,
       });
 
@@ -255,12 +256,10 @@ describe('ChannelPreview', () => {
       await useInitializeChannel(c);
       const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-      const testChannel = {
+      const testChannel = generateChannelWrapper({
         ...channel,
-        countUnread: jest.fn().mockReturnValue(0),
-        muteStatus: jest.fn().mockReturnValue({ muted: false }),
         on: channelOnMock,
-      };
+      });
 
       const { getByTestId } = render(<TestComponent />);
 
@@ -291,9 +290,9 @@ describe('ChannelPreview', () => {
   it('should update the unread count to 0 if the channel is muted', async () => {
     const channelOnMock = jest.fn().mockReturnValue({ unsubscribe: jest.fn() });
 
-    const c = generateChannel({
+    const c = generateChannelWrapper({
       countUnread: jest.fn().mockReturnValue(10),
-      muteStatus: jest.fn().mockReturnValue({ muted: false }),
+      muteStatus: jest.fn().mockReturnValue({ muted: true }),
       on: channelOnMock,
     });
 
@@ -304,7 +303,7 @@ describe('ChannelPreview', () => {
     await waitFor(() => getByTestId('channel-id'));
 
     await waitFor(() => {
-      expect(getByTestId('unread-count')).toHaveTextContent('10');
+      expect(getByTestId('unread-count')).toHaveTextContent('0');
     });
 
     act(() => {
diff --git a/package/src/components/ChannelPreview/hooks/useChannelPreviewData.ts b/package/src/components/ChannelPreview/hooks/useChannelPreviewData.ts
index 5fe2dae305..a678e7042a 100644
--- a/package/src/components/ChannelPreview/hooks/useChannelPreviewData.ts
+++ b/package/src/components/ChannelPreview/hooks/useChannelPreviewData.ts
@@ -5,6 +5,9 @@ import type { Channel, ChannelState, Event, MessageResponse, StreamChat } from '
 
 import { useIsChannelMuted } from './useIsChannelMuted';
 
+import { useLatestMessagePreview } from './useLatestMessagePreview';
+
+import { useChannelsContext } from '../../../contexts';
 import type { DefaultStreamChatGenerics } from '../../../types/types';
 
 export const useChannelPreviewData = <
@@ -12,14 +15,40 @@ export const useChannelPreviewData = <
 >(
   channel: Channel<StreamChatGenerics>,
   client: StreamChat<StreamChatGenerics>,
-  forceUpdate?: number,
+  forceUpdateOverride?: number,
 ) => {
+  const [forceUpdate, setForceUpdate] = useState(0);
   const [lastMessage, setLastMessage] = useState<
     | ReturnType<ChannelState<StreamChatGenerics>['formatMessage']>
     | MessageResponse<StreamChatGenerics>
   >(channel.state.messages[channel.state.messages.length - 1]);
   const [unread, setUnread] = useState(channel.countUnread());
   const { muted } = useIsChannelMuted(channel);
+  const { forceUpdate: contextForceUpdate } = useChannelsContext<StreamChatGenerics>();
+  const channelListForceUpdate = forceUpdateOverride ?? contextForceUpdate;
+
+  const channelLastMessage = channel.lastMessage();
+  const channelLastMessageString = `${channelLastMessage?.id}${channelLastMessage?.updated_at}`;
+
+  useEffect(() => {
+    const { unsubscribe } = client.on('notification.mark_read', () => {
+      setUnread(channel.countUnread());
+    });
+    return unsubscribe;
+  }, [channel, client]);
+
+  useEffect(() => {
+    if (
+      channelLastMessage &&
+      (channelLastMessage.id !== lastMessage?.id ||
+        channelLastMessage.updated_at !== lastMessage?.updated_at)
+    ) {
+      setLastMessage(channelLastMessage);
+    }
+    const newUnreadCount = channel.countUnread();
+    setUnread(newUnreadCount);
+    // eslint-disable-next-line react-hooks/exhaustive-deps
+  }, [channel, channelLastMessageString, channelListForceUpdate]);
 
   /**
    * This effect listens for the `notification.mark_read` event and sets the unread count to 0
@@ -27,9 +56,14 @@ export const useChannelPreviewData = <
   useEffect(() => {
     const handleReadEvent = (event: Event) => {
       if (!event.cid) return;
-      if (channel.cid === event.cid) setUnread(0);
+      if (channel.cid !== event.cid) return;
+      if (event?.user?.id === client.userID) {
+        setUnread(0);
+      } else if (event?.user?.id) {
+        setForceUpdate((prev) => prev + 1);
+      }
     };
-    const { unsubscribe } = client.on('notification.mark_read', handleReadEvent);
+    const { unsubscribe } = client.on('message.read', handleReadEvent);
     return unsubscribe;
   }, [client, channel]);
 
@@ -70,16 +104,35 @@ export const useChannelPreviewData = <
       refreshUnreadCount();
     };
 
+    const handleNewMessageEvent = (event: Event<StreamChatGenerics>) => {
+      const message = event.message;
+      if (message && (!message.parent_id || message.show_in_channel)) {
+        setLastMessage(message);
+        setUnread(channel.countUnread());
+      }
+    };
+
+    const handleUpdatedOrDeletedMessage = (event: Event<StreamChatGenerics>) => {
+      setLastMessage((prevLastMessage) => {
+        if (prevLastMessage?.id === event.message?.id) {
+          return event.message;
+        }
+        return prevLastMessage;
+      });
+    };
+
     const listeners = [
-      channel.on('message.new', handleEvent),
-      channel.on('message.updated', handleEvent),
-      channel.on('message.deleted', handleEvent),
+      channel.on('message.new', handleNewMessageEvent),
+      channel.on('message.updated', handleUpdatedOrDeletedMessage),
+      channel.on('message.deleted', handleUpdatedOrDeletedMessage),
       channel.on('message.undeleted', handleEvent),
       channel.on('channel.truncated', handleEvent),
     ];
 
     return () => listeners.forEach((l) => l.unsubscribe());
-  }, [channel, refreshUnreadCount, forceUpdate]);
+  }, [channel, refreshUnreadCount, forceUpdate, channelListForceUpdate]);
+
+  const latestMessagePreview = useLatestMessagePreview(channel, forceUpdate, lastMessage);
 
-  return { lastMessage, muted, unread };
+  return { latestMessagePreview, muted, unread };
 };
diff --git a/package/src/components/Message/MessageSimple/utils/generateMarkdownText.ts b/package/src/components/Message/MessageSimple/utils/generateMarkdownText.ts
index 2851be1376..4e116cc4f2 100644
--- a/package/src/components/Message/MessageSimple/utils/generateMarkdownText.ts
+++ b/package/src/components/Message/MessageSimple/utils/generateMarkdownText.ts
@@ -35,5 +35,11 @@ export const generateMarkdownText = (text?: string) => {
 
   resultText = resultText.replace(/[<"'>]/g, '\\$&');
 
+  // Remove whitespaces that come directly after newlines except in code blocks where we deem this allowed.
+  resultText = resultText.replace(/(```[\s\S]*?```|`.*?`)|\n[ ]{2,}/g, (_, code) => {
+    if (code) return code;
+    return '\n';
+  });
+
   return resultText;
 };