Ethereum Classic (ETC) Attempts Breakout
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Ethereum Classic (ETC) is one of the faster recovery stories, as the asset once again attempts to regain the $60 level. ETC expanded rapidly, gaining more than 30% to its price overnight, to reach $59.88. The rally was extended on Wednesday, raising expectations of ETC breaking out to three-digit prices.
ETC Charts Look Hopeful
The ETC breakout is partly fueled by chart analysis and a self-fulfilling expectation of a breakout. The rise above $42 sparked the recent daily rally, with expectations of breaking more resistance levels.
Now that ETC is quickly breaking resistance, the asset may attempt to repeat previous levels. ETC reached a peak above $117 on record volumes, while the current rally is happening at much lower trading activity.
Miners Return to the Network
The Ethereum Classic network had relatively low hashrate in 2020, and even posed risk for attacks. But lately, miners are returning to the network, and activity levels are about 10 times higher in comparison to late 2020. ETC mining peaked above 28 TH/s, still about 20 times lower in comparison to Ethereum mining.
However, the Ethereum network also sees a significant outflow of miners and the compatibility of ETC may look more rewarding. Ethereum is preparing to introduce significant changes to miner rewards and transaction fee schedules, and the Ethereum Classic network still uses the older rules of mining.
ETC is profitable, with a 500 MH/s setup potentially earning more than 170 ETC tokens per year. For existing miners, switching to the network with still lower difficulty may make sense.
The ETC network has expanded to 492 nodes with concentration in a few leading countries, incuding the USA and China.
The more secure network is beneficial for ETC trading, as it is making the asset more reliable and secure, with less chance to repeat the past double-spend attacks.
Magneto Hard Fork Puts Spotlight on ETC
The Ethereum Classic team showed it has not abandoned the project, planning an upgrade in July. The Magneto hard fork, about 22 days away, will improve gas usage on the network. Currently, ETC is cheaper to use, but increased transaction demand may lead to significant fees. The Magneto upgrade will implement changes to gas schedule, similar to a previous Ethereum update.
ETC also operates its own version of the Ethereum Virtual Machine, although the network’s intention is to remain a mined network and not switch to proof of stake. The Magneto hard fork will not create a new asset and will only affect node operators and miners.
Grayscale ETC Trust Sells Shares to Parent Company
Another recent event that raised the visibility of ETC is the decision of the Digital Currency Group to spend $50M on shares of the Grayscale Ethereum Classic Trust.
DCG, the parent company of Grayscale Capital, is buying the shares at a discount compared to market prices.
Even with the market price rally, Grayscale sells the shares at a discount, equivalent to a market price of $46.53 based on the latest estimation.
ETC is one of the first assets to be added to Grayscale, despite the initial skepticism about the network and subsequent low activity problems.
The exact effect of the purchase is yet to be reflected in the price action, though the purchase of shares is expected to happen on the open market. The ETC locked in those shares is already acquired, and will not raise spot demand for coins.
Will ETC Return to Peak Interest
Peak interest in Ethereum Classic based on searches happened in May, coinciding with the price rally above $100. ETC rises as interest in large-cap, well established altcoins returns tentatively. The asset also trades at a premium, already above $60 on the BitHumb exchange, where some crypto prices are traditionally higher when denominated in Korean won.
For now, the price recovery is happening with more subdued attention. However, ETC may benefit from the hype surrounding the Ethereum London upgrade and EIP-1559. Those significant upgrades will happen in July.
The interest in ETH may boost demand to buy ETC, with the expectation of moving to a much higher price range. ETC remains a speculative asset, attractive because of its relatively high liquidity and the potential for multiplying its price.
ETC is Highly Accessible
ETC has circulated since 2016, and is one of the most accessible digital coins. ETC can be exchanged through most multi-asset wallets.
For now, ETC is not available to buy on Binance with a credit card. This may be due to the asset’s past history of double-spending, making the exchange liable for the losses.
However, ETC is still available for trading on multiple exchanges, with high reported volumes on DigiFinex. The most liquid and reliable pair for ETC is on the Binance International exchange, with significant USDT liquidity.
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