Ethereum Classic Price Surges By Over 30%
Ethereum Classic Price Surges By Over 30%
Markets Weekly is a weekly column analyzing price movements in the global blockchain token markets. This edition looks at the week from 10th through 16th December.
Ether classic (ETC) made a strident comeback this week.
As the nascent digital currency surged in value, its hashrate also rose and its supporting community announced a new monetary policy proposal.
Zooming in on the figures, ETC prices rose as much as 37% during the week, climbing to a high of $1.11 from their opening price of $0.81, CoinMarketCap figures reveal.
Market observers saw the week as a positive one for the project, which splintered off in the wake of the collapse of The DAO.
“ETC is being embraced by the community as a superior and decentralized alternative to ETH,” said Petar Zivkovski, COO of leveraged bitcoin trading platform Whaleclub.
He asserted that while “ETC and ETH are battling for a piece of the same pie,” some market observers are predicting that ETC’s market cap will surpass that of ETH’s in either 2017 or 2018.
Discontent in China?
Arthur Hayes, co-founder and CEO of leveraged bitcoin trading platform BitMEX, provided a similar forecast, telling CoinDesk that “I expect ETC to make a move for parity with ETH in 1Q2017.” He further elaborated on ETC’s tailwinds, stating that:
“The Chinese community is not happy with the direction that Vitalik has taken Ethereum. This is mostly due to DAO bail-out. Pumping ETC is their retribution.”
For now, ethereum’s loss may be ethereum classic’s gain.
In addition to the surging price, another sign of ETC’s rising adoption is its sharp increase in hashrate, a measure that surged 68% from 534 gigahashes/second (GH/s) at 12:00 UTC on 10th December to a high of 899.47 GH/s at 06:00 UTC on 16th December, according to GasTracker.io data.
Kong Gao, overseas marketing manager for bitcoin trader RichFund, speculated on the various factors that could be pushing ETC’s hashrate higher, singling out Zcash’s “continued price decline” and ethereum’s upcoming implementation of proof-of-stake.
All speculation aside, a higher hashrate makes the ethereum classic network less vulnerable to 51% attacks, which is more good news for the cryptocurrency.
Classic still faces hurdles
Even though ethereum classic has made some great strides forward lately, the platform will likely need to overcome significant hurdles if it wants to either equal or surpass ethereum. For starters, ethereum and its token ETH benefit from a strong network effect.
“There are still strong network effects that will tend to make the more widely used coin (currently ETH) more and more dominant with time,” said algorithmic trader Jacob Eliosoff. However, he added that “the ETC crew have been doing well to resist that effect, in particular solidifying their strategy as to how to differentiate ETC from ETH.”
Ethereum classic will need to obtain greater adoption, a key requirement according to Zivkovski. He emphasized that to remain viable long term, ETC will need to “grow out its community and succeed in attracting developers to build on its platform,” something he described as “not an easy feat”.
Should ETC succeed in surpassing ETH’s market cap, the former currency would experience some fairly robust gains. Currently, ETC’s market cap stands at roughly $94m, less than 15% of ETH’s,which stand at more than $680m, CoinMarketCap data reveals.
Bitcoin’s relative calm
Bitcoin had a far less exciting week than ethereum classic, rising to a 34-month high but otherwise having a relatively quiet week. Prices reached as much as $788.49 on 13th December, a new 2016 annual high and the most elevated value since February 2014, according to the CoinDesk Bitcoin Price Index (BPI).
However, even this 34-month high represented an only 2.3% increase from bitcoin’s opening price of $770.41 at the beginning of the week.
The BitMEX 30-day Historical Volatility Index (.BVOL Index), a measure of annualized rolling 30-day volatility, averaged 25.15% during the seven-day period from 10th–17th December.
Hayes told CoinDesk that volatility pushed lower as traders waited for the listing of the March 2017 futures contracts. These contracts were listed at 08:00 UTC on 16th December, he noted.
Bitcoin prices had traded at elevated levels all week, fluctuating fluctuating within 1% of the previous 2016 high of $781.31 for most of the period.
The digital currency experienced these price movements amid sustained bullish sentiment, as the market was an average of 90% long during the six days between 10th–16th December, going by Whaleclub data.
“Price is still quite bullish,” noted Zivkovski. However, he emphasized that many market participants are taking a breather to see what the market will do next.
“Price will need to continue rising over the next few days or weeks to give new money enough confidence to keep investing and sway current long position holders into delaying their profit-taking. Volume is lower than usual as traders sit on the sidelines of this 34-month high, uncertain, anticipating what will happen next.”
Article Source: http://www.coindesk.com
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