The formerly sleepy cryptocurrency known as Ethereum Classic appears to have woken up like a phoenix and is bucking market trends in a bullish manner. While most cryptocurrencies are staying flat or are on the decline, Ethereum Classic has seen generally steady upward movements in price over the last three months.
ETC on July 6th, 2018 via coinmarketcap.com
Ethereum Classic has had somewhat of a strange price history. After entering the market in mid-2016, the currency laid dormant until partway through 2017 when it suddenly saw its first major increase to the $20 range.
Although prices cooled off again in the third quarter, Ethereum Classic blasted off once more to hit its all-time high of $45 in mid January of this year. This pump is in line with the rest of the market where bitcoin nearly hit $20,000.
After falling off from a second recovery in May where the currency hit $24 each, the nascent altcoin appears to be gearing up for another takeoff. And this one could be more solid than previous surges thanks to Coinbase.
ETC + Coinbase = <3
One of the biggest bits of news to hit Ethereum Classic this year was the surprising announcement by major exchange Coinbase that they will soon be supporting Ethereum Classic as a tradable asset.
Prices did not immediately respond to this news. But as the market continues to make its slowing decline, Ethereum Classic seems to be absorbing a lot of this energy and is generating upward movement.
Historically speaking, when an asset is listed on Coinbase, it generally sees a lot more growth and attention. This is because Coinbase is often the first stop many people make when investing in cryptocurrencies. Coinbase is still relatively easy to use and offers competitive fees. It is also the entry point for many would-be altcoin investors that need to get their hands on bitcoin first.
Additionally, as Coinbase provides crypto-to-fiat gateways, this addition will most certainly lead to additional liquidity for Ethereum Classic as there is now a direct way to buy and sell it for dollars and other fiat currencies through that major exchange.
Why Ethereum Classic?
The announcement that Ethereum Classic would be the next asset added to Coinbase angered and confused many, as they were expecting Ripple’s XRP to be the next addition.
Read also: Coinbase Adds Ethereum Classic
While Coinbase has not made a specific statement as to why they chose ETC over another asset, there are a number of growing reasons why Ethereum Classic could be an attractive asset for some investors.
From a technological perspective, Ethereum Classic offers all of the same functionality and flexibility as Ethereum. Further, as Ethereum moves to proof-of-stake mining, Ethereum Classic will continue using proof-of-work, which could attract an entirely new generation of miners to the chain.
Finally, a slow but steady stream of new projects are beginning to make use of Ethereum Classic due to its lower cost and easy to develop for system. The ecosystem itself is also supported very widely by the veritable army of developers and investors including the infamous Grayscale Investments.
Where Do We Go From Here?
As for where ETC prices will be in the next year or two, a lot of this depends on how much adoption the chain can see.
One significant reason for Ethereum’s high valuation is that the Ether cryptocurrency is essential for running applications on the system and paying for transaction fees for tokens. And as decentralized exchanges become even more common, the need for Ether will also grow and in many ways replace bitcoin.
Currently, Ethereum Classic has a handful of projects that are running or are planning to deploy on it. The Ethereum Classic development team is also working on techniques such as sidechains that would be ideal for corporate entities that need some degree of mutability but still want the advantages that blockchain offers.
So where will the price go? Most likely it will consistently be below that of Ethereum, but it’s growth will come not only due to speculation, but also through direct usage, which does appear to be growing at a steady pace.
Finally, the project had a fork not long ago in which they created what is essentially a hard cap on the total supply. This means that once this cap is reached, much like bitcoin, no more ETC will be released. This is important because this will help to stabilize asset prices, and make ETC a better long-term store of value.
All of these are generally good for asset prices in the long-term.