Analyst Note: Revisiting Ethereum Classic
Key Insights
- Ethereum Classic (ETC) was in the news last week on a $10 million investment from Bitmain along with supportive comments from Vitalik Buterin.
- ETC price rose quickly, but looking at fundamental metrics, nothing has changed about this chain. Volumes and users have been largely unchanged for years. Applications are non-existent.
- ETC has been an interesting way for investors to trade Ethereum upgrades.
Ethereum Classic (ETC) is in the news for the first time in a LONG time. Despite maintaining a $3 billion market cap, most in crypto have left this token for dead. The Ethereum fork jumped ~30% late last week after months (more like years) of stagnation. The token started receiving attention from not only speculators but also key figures like Vitalik Buterin. What's going on that's drawing folks back in?
What is ETC?
Ethereum Classic is a hard fork of the original Ethereum blockchain. In 2016, a hacker was able to exploit the original DAO, an Ethereum-based venture fund, to steal 3.6 million ETH. The community was divided on how to proceed, one camp wishing to roll back the chain, the other opting to make no changes. The original Ethereum chain was forked, with the legacy (unchanged) chain being rebranded Ethereum Classic. At the time both chains were identical, but since then they have developed their own roadmap and visions.
Tom is a Sr. Research Analyst at Messari. His primary focus is on Layer-1's as well as the relationship between traditional finance and crypto. Prior to joining Messari, Tom worked in Investment Consulting at Meketa and Investment Management at SSGA. Tom studied Finance at Bentley University and earned his CFA and CAIA Charters.