Ethereum Classic is an interesting prospect when it comes to cryptocurrency investment - being an offshoot of one of the top projects in the space and having some pretty solid credentials of its own. But can ETC ever rival its more famous sibling?
Ethereum Classic came into being after the original Ethereum blockchain was hacked in 2016, with $50 million of funds being hijacked. The network then underwent a hard fork and split into a new network, which is what we now call Ethereum, and the existing platform, now known as Ethereum Classic.
Tokens that result from hard forkings have experienced mixed fortunes over the years but Ethereum Classic has shown that it has the potential for serious price movement. Whilst it is arguably more volatile than Ethereum, it is this volatility that makes ETC an interesting prospect for investors prepared to take on a little risk.
But as Ethereum continues to undergo its much-lauded 2.0 upgrade, does Ethereum Classic really have much of a future? In the following article, we’ll consider five reasons why Ethereum Classic (ETC) might still be worth considering as part of a diverse cryptocurrency investment portfolio.
1. Low Fees
It’s no secret that Ethereum’s GAS fees have become a bone of contention for many developers looking to build on the platform and it could even be argued that this has allowed rivals like Cardano to gain ground on the original smart chain.
This is a major advantage that Ethereum Classic has over its predecessor. ETC has equivalent scalability and can support myriad smart functions in the same way that Etheruem can (pre-Ethereum 2.0 at least). It also boasts the same block time and can do so without charging the same high fees.
At the time of writing, the average fee on Ethereum equated to around $2.15, according to data from BitInfoCharts. Meanwhile, the average cost of a transaction on Ethereum Classic was just around a third of a cent, making it much more appealing from a cost of usage perspective.
Lower fees mean that Ethereum Classic still has appeal as a smart blockchain. It is likely that it will always remain in Ethereum’s shadow and is unlikely to be breaking into the top 20 cryptocurrencies any time soon, but it should be remembered that investment is all about price movement and ETC has shown that it still has some legs when it comes to price, as we shall come to later.
2. Upgrades
Despite the “classic” moniker, the ETC developers have not neglected to upgrade the system on a regular basis since the hard forking of 2016. In fact, the Ethereum Classic infrastructure has been tweaked several times since then.
This looks like a trend that’s set to continue. 2021 saw the implementation of the Magneto hard fork, an upgrade that was intended to improve network security and further reduce GAS fees. It was hoped that this would restore investor confidence after 2016’s security breach and the impact it had on Ethereum Classic’s price certainly suggests success.
The good news for those looking to invest in Ethereum Classic in 2023 is that further upgrades have been announced. The announcement of the Mystique upgrade led to a 25% upswing for ETC and has led to renewed interest in the token.
Mystique will see ETC take on various performance enhancements that have been used on the Ethereum blockchain since early 2021. These include improvements to the Ethereum Virtual Machine as well as further protocol tweaks that should improve immutability and interoperability.
A timescale for Mystique has yet to be revealed, but investors hoping that Ethereum Classic can double their money will need to get in early if they want to reap the full benefits. An upgrade doesn’t guarantee a price increase, but it is certainly good news for ETC investors.
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3. DeFi Compatibility
Anyone interested in Ethereum Classic might already be aware that the platform has many of the same features and capabilities as its more famous sibling. Whilst Ethereum is undoubtedly the king of the DeFi space, it’s worth noting that Ethereum Classic can still deliver in this area and actually has the odd advantage over Ethereum.
ETC is still a smart contract platform with a huge amount of versatility. Whilst some have expressed concern that the proof-of-work consensus mechanism is starting to become obsolete, others have pointed out that Ethereum’s move to a more economical proof-of-stake system could introduce security issues. This is particularly relevant, given that the 2016 fork occurred due to a security breach.
If ETC emerges as the more secure option, then it is possible it will continue to have relevance as a platform for the development of DeFi projects.
In addition, the team behind ETC have made further inroads into the DeFi world with the launch of the Wrapped ETC token, which can be stored in ERC-20 wallets and be staked on any of the Ethereum-based liquidity pools to allow users to generate returns.
Ethereum Classic might not be a rival to Ethereum as the number one platform for DeFi but it has proven itself to have genuine utility for security-conscious projects and provides a solid alternative to the ‘other’ Ethereum.
4. Immutability
As we’ve noted above, Ethereum Classic has certain security advantages over Ethereum. Immutability was one of the key tenets of cryptocurrency when Bitcoin hit the scene and is effectively the feature that means blockchains are fully auditable and the transactions carried out on them maintain their integrity.
Whilst Ethereum has adjusted to meet the demands of DeFi projects and arguably compromise immutability - especially with its upcoming shift to proof-of-stake. Ethereum Classic, on the other hand, promised to maintain the immutability of the blockchain. This emphasis has arguably allowed Ethereum Classic to survive and stay relevant since the 2016 fork.
Whilst ETC’s insistence on remaining has inevitably limited its scalability, which in turn has led to a lack of uptake in the age of DeFi, Ethereum Classic’s immutability means it has established itself as an alternative to Ethereum.
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5. Ethereum Classic’s Recent Price Performance
We have outlined several reasons why Ethereum Classic might still be a good bet in 2023, but so far we’ve yet to discuss the most obvious reason that ETC still presents an investment opportunity: its recent price movement.
The past year was an incredibly volatile time for the cryptocurrency market, with several record-breaking runs in the first half of the year. Ethereum Classic itself reached an all-time high of $176.16 in May - having soared from under $20 in April.
Whilst Ethereum Classic has dropped to around $24.71 at the time of writing, it is still up around 750% on its price at this two years ago, meaning anyone who chose to buy ETC in 2020 would have seen some very impressive returns by now.
If nothing else, the fact that Ethereum Classic was swept up in the market upswings of 2021 shows that it is still on the radar of many investors and still has the capacity for significant price growth.
ETC is also much, much cheaper per token than Ethereum, meaning it is a comparatively economical way to invest in the technology associated with the blockchain.
Ethereum Classic Price Predictions - What Can We Expect From ETC In The Future?
It’s probably a stretch to say that Ethereum Classic will double your money before 2023 is out, but if we look at some price predictions from leading analysts it would appear that ETC is expected to make significant gains in the coming years.
TradingBeasts, for example, has ETC trading over the $30 mark for the first half of the year and then slightly decreasing towards the end, at a projected average trading price of $25.32.
Elsewhere, DigitalCoinPrice has been more optimistic with its Ethereum Classic price prediction. According to its data analysis, ETC will hit $34.95 by the end of the year 2023, thus potentially doubling investors’ money in less than a year.
Of course, these predictions are highly speculative, but as it stands they are the best indication we have of what to expect from ETC in the coming years.
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Conclusion - Is Ethereum Classic A Good Investment In 2023?
Ethereum Classic may not have had the success of Ethereum, but it has demonstrated its ability to stay relevant over the last few years - as well as its capacity for significant price increases. Whilst some would argue that there are many superior smart chains out there, ETC is founded on the same principles as the most successful of them all: Ethereum.
Of course, ETC isn’t likely to rival Ethereum, Cardano or Binance Smart Chain when it comes to a platform for building DeFi projects, but it does provide a secure and robust alternative that may still be of interest to developers. There’s also the possibility that any future Ethereum Classic upgrades will improve the blockchain and allow it to offer more competition in the DeFi space.
As we have seen, several analysts are predicting growth for ETC and, whilst it might not double your money in 2023, it could prove to be a good investment over the next two years or so. Only time will tell if these predictions prove to be accurate, but given the uncertainty of the cryptocurrency market, Ethereum Classic has as good a chance as any altcoin of yielding returns.
All things considered, we believe that Ethereum Classic still represents a worthwhile investment. Whilst it is always likely to experience price runs in correlation with Bitcoin and the wider market, it could well prove a sleeper investment in the coming years.
Where To Buy Ethereum Classic
If you’re interested in buying Ethereum Classic in 2023 then the good news is that the token is widely listed and you’ll find it on most reputable exchanges. If you are yet to actually invest in cryptocurrency or are in the market for a new provider, then we’d recommend checking out eToro.
Not only is eToro one of the most recognised brands in the retail trading market, it also has a solid reputation as a highly user-friendly platform with plenty of information to help new traders get to grips with the markets.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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FAQs
What is Ethereum Classic used for?
Ethereum Classic is a smart chain that leverages smart contracts to provide a platform for developers to build dApps. It was formed when the original Ethereum project hit a hard fork in 2016. Whilst ETH has gone on to be the most successful of the two, ETC still has plenty of use cases and is arguably more secure than its sibling.
Will Ethereum Classic double my money in 2023?
It’s unlikely that Ethereum Classic can double your money before the end of 2023, but that isn’t to say it won’t prove to be a smart investment. In fact, we’ve found ETC price predictions that suggest the altcoin could hit 100% growth as early as 2023.
Where can I buy Ethereum Classic?
If you’re looking to buy Ethereum Classic then you’ll find it listed on most major exchanges. We normally recommend eToro as our go-to platform as it’s easy to use and has an excellent reputation. Opening an account is very straightforward and you can be up and running in minutes.
Is Ethereum Classic better than Ethereum?
Ethereum (ETH) has definitely emerged as the dominant version of the blockchain, but Ethereum Classic does have its advantages. For one thing, it has more immutability than ETH and many developers are attracted to this. Is ETC better than ETH? Probably not, but it is a valid alternative for developers looking to keep their projects on a proof-of-work system.
Does Ethereum Classic have a future?
Many crypto market observers have written Ethereum Classic off over the years but 2021 showed us that there is still some life in the project, after ETC saw price increases amounting to around 750%. It's also worth noting that plenty of market analysts are predicting significant future growth for Ethereum Classic.