Ethereum Classic Rally Surges Amidst Ongoing ETF Speculation

Ethereum Classic Rally Surges Amidst Ongoing ETF Speculation

Ethereum Classic (ETC) has witnessed a remarkable 37% surge in value over the last seven days, capturing the attention of crypto enthusiasts and investors alike.

ETF Anticipation Boosts Ethereum Classic

Market observers speculate that this surge is linked to growing anticipation among investors regarding the potential approval of an Ethereum (ETH) exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). Notably, the SEC recently gave the green light to spot Bitcoin ETFs on January 10. Despite this, SEC Chair Gary Gensler emphasized that this approval doesn’t necessarily imply a similar treatment for Ethereum.

Regardless, Ethereum Classic experienced a surge of over 35% this week, reaching a current trading value of $26.65, accompanied by a market capitalization of $3.8 billion, according to CoinGecko data. This upward momentum is attributed to increased trading volumes and the excitement surrounding the potential approval of an Ethereum ETF.

Unraveling the Surge: Fork Speculation and Network Enhancements

The sudden surge in Ethereum Classic’s value has left many puzzled, especially considering the current landscape. Some skeptics suggest that the rapid climb may be linked to the anticipation of an upcoming hard fork scheduled for later this month.

This hard fork is expected to align the network’s Ethereum Virtual Machine (EVM) more closely with Ethereum’s, potentially attracting collaborative projects to the Ethereum Classic chain.

Putting this into perspective, the network’s hashrate achieved all-time highs after Ethereum transitioned to a proof-of-stake mechanism in late 2022. Former Ethereum miners redirected their GPU mining rigs to Ethereum Classic, seeking an alternative revenue stream and contributing to the heightened hashrate.

Despite Ethereum Classic’s post-Merge hashrate stability, the network processes only around 30,000 transactions per day, comparable to the baseline for Bitcoin Cash. However, Ethereum Classic’s hashrate remains less than 15% of Ethereum’s pre-Merge recorded levels.

In contrast, ETHPoW, the Ethereum hard fork initiated around the Merge to compete with Ethereum Classic, currently operates with approximately one-tenth of the latter’s hashrate.

Market Dynamics and Larry Fink’s Perspective

Interestingly, market reactions seemed to anticipate the SEC’s unofficial announcement, leading to a premature sell-off of the news and simultaneous speculation on potential Ethereum ETFs.

Larry Fink, the CEO of BlackRock, has also voiced support for the introduction of an Ethereum-based ETF, following the successful launch of the highly anticipated Bitcoin ETF.

Paving the Way for Ethereum Approval

The recent approval of spot Bitcoin ETFs has significant implications for the broader cryptocurrency market. This milestone decision allows ordinary investors to participate in the world’s largest cryptocurrency without direct ownership.

Bitcoin ETFs Set the Stage for Ether Approval

The approval of Bitcoin ETFs could position Bitcoin as a potential fixture in retirement accounts and pension plans, fostering mainstream acceptance. The ensuing volatility in Bitcoin’s price saw it surpassing $47,000 at the beginning of 2024, marking its highest level in nearly two years, according to CoinGecko data.

Major asset managers like BlackRock expressing interest have prompted others to follow suit. The SEC’s approval of Bitcoin ETFs encompasses various companies, including Ark Invest, 21 Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Hashdex, Invesco, WisdomTree, Valkyrie, and VanEck. Some of these ETFs commenced trading shortly after approval, with Grayscale, BlackRock, and Fidelity dominating trading volumes.

What Lies Ahead for Spot Ether ETFs

Looking ahead, the SEC is expected to make decisions on spot Ether ETF applications starting in May. Firms such as BlackRock, Invesco, Ark, VanEck, and Grayscale are among those eagerly seeking approval, signaling a potential new era for Ethereum in the ETF landscape.

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