Ethereum Classic Is A Dead Coin – But The Price Says Otherwise

The name Ethereum is one that many of those in the crypto market are familiar with. After all, it is the second most valuable cryptocurrency by market capitalization. But only a few people are familiar with Ethereum Classic. Ethereum Classic is the lesser-known relic of the old Ethereum network.

How Did Ethereum Classic Come to Be?

In 2016, hackers exploited Ethereum to steal $50 million worth of ETH. This led to a disagreement within the community on whether to have a hard fork to restore the funds. The majority of the community supported the hard fork, which resulted in the current Ethereum chain. But there were a few members of the community who opposed the hard fork. This group remained on the old Ethereum chain and renamed it Ethereum Classic.

The hard fork meant that Ethereum Classic was completely cut off from the new Ethereum chain. This meant it could not access any updates or improvements. It also retained the old Ether denoted by ETC as its cryptocurrency. Since then, Ethereum has continued to rise in use and value – surprisingly, so did Ethereum Classic.

Phoenix Rising from the Ashes

In a classic case of what is dead may rise again, it appears that Ethereum Classic has emerged from its ruins. The coin has seen a steady increase in its value since last year. It slowly moved from being worth between $4 – $5 to cross the $100 mark. It benefited greatly from the crypto rally of late 2020 and early 2021, which helped it reach an all-time high of $176.16 on May 6, 2021.

According to crypto expert Joshua Enomoto, the apparent refusal of this coin to die is worth observing. In his views:

‘Many cryptocurrency advocates regard Ethereum Classic as a dead coin and to be blunt, it’s easy to see why. Yet the dramatic percentage increase in Ethereum Classic during the crypto rally phase, combined with its resiliency during the current correction, suggests that more investors should pay attention to ETC.’

What is Causing the Resurgence?

It is hard to tell what is responsible for the sustained push in the value of the ETC coin, which has seen it priced at around $50. But from the look of things, it is not institutional investors that are pumping the coin. Instead, it appears that retail investors are the ones behind the performance of the coin as they look for the next big thing to pump and sell for short-term profits.

It may even be that new investors, having heard about Ethereum, mistakenly buy ETC thinking they are buying Ethereum. Many in the crypto community consider this risky because the coin is prone to security breaches and with no specific use case. But Enomoto sees the possibility of the coin maintaining its good run for more time. In his view:

‘The insistence for Ethereum Classic contributors to maintain its proof-of-work (PoW) protocol could be a saving grace for the network. PoW raises the competitive barrier to entry for mining operations, which in turn bolsters the profit margin for miners.’

Thus, he sees the coin as something that could likely attract more people, especially if it maintains its value. According to him, ‘Should ETC maintain a reasonable price baseline, Ethereum Classic could attract more contributors who have grown disillusioned with high efficiency but low margin proof-of-stake networks.’

Conclusion

It is hard to tell how long Ethereum Classic will maintain its good run. But as more people look for the next coin to pump and dump, ETC looks like it may enjoy the ride for a little longer.

Regardless, it is important to be careful when investing in cryptocurrencies. They are purely speculative assets, and you need all the information before investing in any. This is especially the case with ETC as there is no development on the blockchain. It is all speculative value with very little substance behind it. You can register on Blockster to stay updated on cryptocurrency news.

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