As the world’s second largest cryptocurrency by market capitalization, Ethereum Classic (ETC) has had a rocky few years. After a hard fork in 2016 created Ethereum (ETH) and ETC, the two cryptocurrencies have been in competition with each other.
While ETH has become the dominant coin, ETC has remained a top-10 cryptocurrency by market cap and is currently the sixth largest coin.
In 2020, ETC experienced a resurgence after being added to major exchanges like Coinbase and Binance. The coin’s price more than tripled from around $5 in January to over $18 in December.
2021 has been off to a strong start for Ethereum Classic as well. The price of ETC started the year at around $17 and has already reached $33, as of writing.
This puts the coin up nearly 100% since the start of the year. .
So, what’s driving Ethereum Classic’s recent price increases? Let’s take a look at some of the factors that could be behind the surge.
One factor that could be driving Ethereum Classic’s price increases is its recent adoption by major exchanges. In 2020, Coinbase listed ETC on its platform, making it one of the few major exchanges to offer the coin.
This helped to increase exposure for ETC and likely drove up demand for the coin.
NOTE: Warning: Ethereum Classic Price Predictions should not be taken as financial advice and should not be relied upon to make any investment decisions. The volatility of cryptocurrency markets means that any prediction is highly speculative and could be subject to large fluctuations. Additionally, the accuracy of any predictions cannot be guaranteed, and relying on any such predictions could lead to significant losses. Be sure to do your own research and understand the risks before investing in Ethereum Classic or any other cryptocurrency.
Another factor that could be influencing Ethereum Classic’s price is increasing interest from institutional investors. In 2020, Grayscale Investments launched an Ethereum Classic Trust, which allows accredited investors to gain exposure to ETC without having to directly purchase and hold the coin.
This product is similar to Grayscale’s Bitcoin Investment Trust, which is one of the most popular products for institutional investors looking to gain exposure to Bitcoin (BTC).
The launch of the Ethereum Classic Trust likely increased demand for ETC from institutional investors who were previously unable or unwilling to directly invest in the cryptocurrency. This increased demand likely helped drive up the price of ETC in 2020 and could be continuing to do so in 2021.
Finally, another factor that could be driving Ethereum Classic’s price increases is increasing use case for smart contracts built on its blockchain. While ETH has become the dominant platform for building decentralized applications (dApps), ETC is also being used by developers for a variety of different projects.
One notable project built on Ethereum Classic is FOAM, a decentralized protocol for geospatial data markets. FOAM is working on developing a “Proof of Location” system that would allow users to verify their location on a map in order to earn rewards.
This system could have a wide range of applications, from verifying addresses for delivery services to helping people find nearby businesses or friends.
If FOAM and other projects built on Ethereum Classic are successful, it could increase use of the ETC blockchain and help drive up its price.
Ethereum Classic appears to be benefiting from a perfect storm of positive factors right now that are helping drive up its price. With increasing adoption from major exchanges and institutional investors, as well as increasing use cases for its blockchain, Ethereum Classic looks poised for continued success in 2021.
9 Related Question Answers Found
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Ethereum Classic is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum Classic also provides a value token called “Classic Ether”, which can be transferred between participants, stored in a cryptocurrency wallet and is used to compensate participant nodes for computations performed.
