The crypto sector has some technical peculiarities, one of which is hard forks. This is a phenomenon that occurs when a blockchain splits off from the “parent protocol” and continues to run independently. This can happen because of a planned update that requires a hard fork or because there are different visions about how the network should continue. In the case of Ethereum, the latter was the case.
After probably the most famous Hack in the history of crypto, where 3.6 million ETH were stolen through a protocol exploit, the Ethereum community faced a crucial crossroads. A decision was made to reverse the theft and address the security issues. However, a significant portion of the Ethereum community opposed this and decided to continue running the blockchain as intended, including the hack. Thus, Ethereum Classic was born.
Where is Ethereum Classic today?
Ethereum Classic (ETC) remains one of the largest blockchains by market capitalization and currently ranks 25th on CoinMarketCap. Trading volume remains substantial, with a daily average well over $100 million. ETC was particularly popular during the 2021 bull run, peaking at around $180 before a correction brought the price down to $13 in the summer of last year. Since then, ETC has repeatedly shown strength and has attempted to break the resistance level at $45 on multiple occasions. Generally, ETC’s price activity closely follows that of Ethereum, with a correlation of 0.87 over the past three months, which is almost a perfect correlation.
Who invests in ETC?
It is worth noting that the coin also follows its own cycles and belongs to a special group. People who invest in ETC are often the same people who invest in Bitcoin Cash, Bitcoin SV and similar cryptocurrencies. They are enthusiasts who believe in the early principles and ideals of cryptocurrencies. These early investors were there from the beginning and have remained true to their beliefs.
ETC is popular among traders because it has a higher volatility compared to ETH and is still listed on all major exchanges. Due to the high correlation with Ethereum, traders use these two currencies for Pair tradingwhich involves buying and selling two related cryptocurrencies simultaneously to profit from their relative price movements.
Does blockchain have a future?
It is safe to say that Ethereum Classic will probably never be a significant blockchain with high activity. ETC mining is highly concentrated and limited, which poses both a security risk and can lead to potentially long transaction times. Since there are no significant projects building on the ETC blockchain, there is no reason to use this chain. The chain’s greatest strength lies in its existing base of traders and fans who remain loyal to the blockchain and cryptocurrency.
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