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All Eyes On Ethereum Classic

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Nov 29, 2022
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4 min read
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This blog post will cover:

  • Fundamental reasons for the ETC growth
  • Some points to consider
  • Conclusion

The news concerning the Merge update in Ethereum blockchain, have provoked a 50% increase in the value of the ETC within a week. The growth comes amid expectations and large investments in the ETC ecosystem from the mining hardware manufacturer, Bitmain. 

Fundamental reasons for the ETC growth

Let’s take a look at the fundamental reasons for the ETC growth.

After merging and switching Ethereum to PoS algorithm, miners are forced to start looking for a coin suitable for mining. Ethereum Classic is certainly one of the candidates. 

  • The coin is in the top 30 by market capitalization.
  • The only blockchain with the ability to run smart contracts on PoW and Ethash mining algorithm. According to developers, the increase in the number of miners will contribute to the growth of network security. 
  • Miners who use special ASIC to get ETH, will be forced to migrate to the Ethereum Classic network due to the processor features.

Some points to consider

It is necessary to mention that the growth of the number of Ethereum Classic miners will cause a serious increase in the complexity of mining, which will reduce the yield and make many miners unprofitable considering the current coin price. Only a steady and long-term growth in the cost of ETC will allow the coin to save a large number of miners to ensure the planned level of network security for DeFi apps.

Unfortunately, the network’s popularity among miners is not enough for a long-term rise in the value of the ETC coin.

The long-term growth of the ETC cryptocurrency may be influenced by its usability. For example, the desire of large DeFi apps to keep functioning on PoW consensus might make a difference here. There are no such statements at the moment, though. As for today, there are just a few DeFi applications in the ETC network, and the total TVL is $877,638. The market is still in a downward trend. The new uptrend and the arrival of popular DeFi apps will give the ETC coin a chance to attract new investors and reach the previous ATH of $180 at least.   

Conclusion

At this very moment, the long-term outlook of ETC is uncertain and requires observation of the further transition of Ethereum to PoS. Possible errors, the willingness of DeFi to maintain the consensus on PoW and the overall market trend might have an impact. 

Let's keep eyes on the action and remember that you can always exchange Ethereum Classic (ETC) on SimpleSwap!

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

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