Ethereum Classic (ETC) Ethereum’s offshoot alternative has been making moves in the past two weeks, gaining 184% in the last half of July even as investors envisage it will benefit from Ethereum’s transition to a Proof of Stake blockchain in September.
Since July 15, the cryptocurrency has put on a spirited bull run, becoming one of the largest gainers in the past twenty days and outdoing Ethereum, which gained roughly 70% in the same period.
What caused ETC’s rise
One of the major driving forces for ETC has been sentiments around the “The Merge”. Whereas Ethereum’s much-anticipated upgrade is expected to bring life-changing improvements to the network, miners will be left holding soon-to-be obsolete mining hardware since the merge will end the practice of Ethereum mining.
Most Ethereum miners have thus been repurposing their mining hardware to other PoW coins, with a considerable number settling for ETC. Last week, Vitalik Buterin, co-founder of Ethereum, also drummed up support for Ethereum Classic, describing it as a “fine chain” and urged those who liked PoW to consider mining ETC.
Institutional players have also been keen on Ethereum Classic with Ethereum’s merge in the offing. Recently Antpool, a Bitmain-linked mining pool, invested $10 million in the Ethereum Classic ecosystem to support the development and exploration of dApps on the network. Moreover, Bitmain has continued to sell Anminer E9, the latest Ethereum mining model compatible with ETC and accepts ETC for all its ant miner models.
All these factors seemed to have invoked confidence in the network, a fact supported by the $17 billion inflows in Ethereum Classic’s market cap last week.
What’s Next For ETC?
Although ETC is still 81% lower from its May 2021 record high of $180, its recovery in the past month has been impressive. According to Dun Leavy, a Sr. Research Analyst Messari, ETC could ride on the sentiments around Ethereum’s merge despite fundamentals such as volumes and users remaining largely unchanged for years.
“Despite the rough fundamentals, ETC has been an interesting way for investors to trade Ethereum upgrades,” Dun tweeted on Monday.
Moreover, others believe that ETC could become a hedge against uncertainties brought by the Merge.
However, some technical analysts are wary that the recent surge could be a bull trap and that price could continue to plummet along with other major cryptos. Currently, ETC’s price is trapped in a falling wedge pattern after tapping a 3-month high of $45 on Friday.