Should I Invest In Ethereum Classic? Is It A Good Investment?

13 Min Read
Last Updated March 27th 2021

Wondering if Ethereum Classic is a good investment and asking yourself “Should I buy Ethereum Classic in 2021?” - then this article is just for you!

Dive into the world of cryptocurrency investing and decide for yourself if Ethereum Classic (ETC) is the right asset for your portfolio amidst the ongoing coronavirus pandemic.

What Is Ethereum Classic?

Ethereum Classic is an open-source blockchain-based platform that supports smart contracts and decentralised applications (dApps). It provides a Turing-complete virtual machine, called the Ethereum Virtual Machine, to execute scripts or instruction sets.

 Here we should note that smart contracts are essential features in the blockchain technology sector. They are defined as self-executing digital applications that run according to predefined terms of an agreement.

The Ethereum Classic network is permissionless, which means that no permission is required and anyone is welcome to participate and contribute to the project. As the network is decentralised, this eliminates the need for third parties, excessive fees, and governmental restrictions.

Let’s not forget that this is one of the main purposes of cryptocurrency: to ensure safe cross-border transactions without the need for trusted third parties or central banks.

Ethereum Classic also acts as a cryptocurrency (ETC), which attracts investors and traders across the world. Note that ETC is currently ranking #51, as per CoinMarketCap.

How Does Ethereum Classic Work?

Now when we know what Ethereum Classic is and how it was created, we should look into its technicalities. So how does ETC work?

Ethereum Classic is a decentralised and open-source computing platform. This means that anyone can join the network, with nodes being spread across the globe. Both Ethereum and Ethereum Classic allow developers to use the open-source code to create smart contacts, tokens, and dApps.

For Ethereum Classic supporters, though, Code is Law. This means that all transactions are final and immutable. Blockchains are created to be immutable so data can’t be altered or erased, which can prevent fraud and guarantee transparency. 

In a way, Ethereum Classic has become like the Ark of the original Ethereum network.

Ethers are mined. Ethereum Classic relies on a proof-of-work algorithm to create new coins. Ether is created as a reward for miners. Users can also pay gas fees with Ether to reduce spam and allocate resources. 

ETC coins are capped at 210 million, which gives a level of scarcity to Ethereum Classic. It’s predicted that 99% of ETC will be in circulation by 2065.

In contrast, Ethereum has transitioned to a proof-of-stake consensus mechanism. Hence, Ethereum Classic has more similarities to Bitcoin over Ethereum. Just like with Bitcoin, ETC mining rewards are reduced: they are decreased by 20% every five million blocks.

To understand Ethereum Classic even better, we have to clarify two main terms that are often used in the cryptocurrency sector:

  1. Smart contracts: A smart contract is defined as an agreement between two parties, with conditions and rules being written in code. Once all the conditions are met, the contract is executed without any third parties. In other words, a smart contract is a self-executing block that operates on predefined conditions. Note that ETC can run Turing-complete smart contracts.
  2. dApps: dApps are software applications that are not controlled by a single entity but run on a distributed computing system. From dApps to track goods to dApp games, these applications have gained a lot of popularity across different businesses and industries.

Though Ethereum has a more substantial growth of smart contracts and dApps compared to Ethereum Classic, Ethereum  Classic has its special space in the crypto universe.

The History Of Ethereum Classic

Ethereum Classic was created in 2016 as a hard fork of the Ethereum network, following the notorious DAO attack when more than $50 million in ether was stolen.

Here we should explain that the DAO (the Decentralised Autonomous Organisation) was created as a smart contract on Ethereum and was meant to act as a venture capital fund. In other words, the DAO would allow people to share ideas and receive funding for their crypto projects. Nevertheless, a hacker drained more than $50 million in ether.

Supporters of the new version Ethereum wanted to revert the hack and return the stolen funds, while supporters of the older version believed that Code is Law claiming that blockchains shouldn’t be manipulated regardless of the outcome.

Thus, the older and unaltered version was called Ethereum Classic, which is considered by many the real Ethereum.

Ethereum Vs. Ethereum Classic

Ethereum and Ethereum Classic are very similar in terms of basic functionalities. Users can create smart contracts and dApps, as well as tokens for their projects.

If you are new to the crypto sector, we should mention that Ethereum is the second-largest cryptocurrency with a market cap of $201,977,738,004 and a 24-hour trading volume of $38,764,812,493, at the time of writing.

Ethereum is often considered the king of smart contracts. To provide an example, Ethereum facilitated the creation of leading coins like Binance Coin and crypto games like CryptoKitties. Ethereum is also constantly upgrading in order to improve scalability and user experience.

Unfortunately, Ethereum Classic is incompatible with any new updates on the Ethereum network, including Ethereum’s transition to proof-of-stake. As such, according to experts, one of the main purposes of Ethereum Classic remains mainly in preserving the original Ethereum code and historical record.

Another difference is that Ethereum Classic is still mined, while Ethereum has moved to proof-of-stake (with many people joining Ethereum 2.0). Curiously enough, because Ethereum Classic is mined, the network is in a way similar to Bitcoin; its monetary policy relies on being capped and algorithmic.

Would you consider investing in Ethereum Classic?

What Is ETC?

ETC, called ether, is the native cryptocurrency of Ethereum Classic. To avoid a great deal of confusion, we should explain that Ethereum’s native crypto is also called ether. The difference is in the ticker symbol. Ethereum Classic is traded under the ticker symbol ETC, while Ethereum is denoted as ETH.

In terms of functionalities, ETC and ETH are similar. For a start, they can be used to pay gas fees.

That said, there are some significant differences, too. ETC coins are mined and there is a limited supply of 210,700,000, with 116,313,299 coins currently in circulation.

The price of ETC is also much lower than that of ETH, which makes it a low entry barrier for crypto beginners.

Read More: What Will Drive The Ethereum Classic Price In 2021?

Is Ethereum Classic A Good Investment?

Ethereum Classic is a good investment particularly for blockchain enthusiasts who believe that blockchains can’t be altered and investors who want to diversify their portfolios in times of economic turmoil.

Here we should mention that the Ethereum Classic team participates actively in the crypto sector during the ongoing coronavirus pandemic. Ethereum Classic Labs supports the project OriginalMy that aims to facilitate the process of collecting digital signatures and tackling fraud beyond borders, which can improve local and international processes during the pandemic.

Moreover, as mentioned above, Ethereum Classic is capped. This can increase scarcity and demand and push prices up.

As developers put it, "Platform token is a critical part of a blockchain system that aligns economic incentives or key stakeholders, users, developers, investors, and miners. Its monetization makes everything tick and helps to bootstrap the ecosystem. However, it has been shown in economic history that reliable long-term monetization is impossible without two key characteristics; utility and scarcity. "

Ethereum Classic is also trying to create ties with Ethereum. Note that ETC’s latest forks Agharta and Phoenix make Ethereum Classic more interoperable with Ethereum.

At the same time, investing in Ethereum Classic remains highly risky. Despite its potential, Ethereum Classic has fallen victim to several 51% attacks, which has resulted in a deteriorating trust in ETC.

In the end, there’s no 100% safe investment, so investors should exercise due diligence.

How Much Could Ethereum Classic Be Worth?

If you are considering buying Ethereum Classic (ETC), then you might want to know how much it could be worth.

Well, first, let’s look at its past performance. Ethereum Classic started trading at $0.66 and surged to $2.14 in July 2016.

The year 2017 was a memorable one for ETC. Though ETC was trading at $1.40 in January 2017, its price started to increase and reached $22.34 in June, which was followed by a drop to around $10 per coin by September 2017. 

Yet, ETC reached its all-time high of $47.77 by December the same year.

In January 2018, ETC was trading at $41.70, but only in a few weeks, it plunged to $19.75, with a range of $12-$16 until December 2018.

Nevertheless, the crypto market crash led to a dramatic decline to $5 per one ETC. The situation didn’t change much during 2019; ETC managed to trade at around $3-$7 throughout the whole year.

The beginning of 2020 seemed more positive for Ethereum Classic, with prices fluctuating around the $11 mark by February 2020.

However, COVID-19 started infecting not only people but economies worldwide. Cryptocurrencies were no exception, and Ethereum Classic dropped to $5 by the end of March 2020.

At the same time, the pandemic led to increased use of blockchain technologies and cryptos, with more and more investors using cryptocurrency as a hedge against recession and inflation.

Ethereum Classic entered this year with a price of $5.70. Prices may increase further, as ETC is trying to improve its interoperability with other blockchains. Some believe that by the end of 2021, Ethereum Classic might hit the $15 mark.

According to LongForecast, however, ETC might end 2021 with a price of $5.63. TradingBeasts, on the other hand, suggests that ETC might be trading at $8.76 by the end of 2021.

DigitalCoinPrice has more positive predictions, suggesting that ETC may trade at $12.18 by December 2021 and reach $25.41 by 2025.

According to Coinpedia, Ethereum Classic is a good investment in the long-term, claiming that ETC may reach $17 by the end of this year and hit $45 in the next few years.

If Ethereum Classic fulfills its promises to become more interoperable with Ethereum and other blockchains and improve the security of its users, then ETC’s price might grow significantly in the near future.

It is possible for ETC to enter the top 20 cryptos list in the next five years and start competing with leading altcoins like Cardano, NEO, and even Ethereum.

That said, let’s not forget that cryptocurrency prices remain speculative and dependent on factors, such as supply and demand, crypto news, and tech innovations. Always do your research and collect accurate data before you start trading any digital asset.

Many experts believe that ETC will increase in value in the long-term as the team has chosen blockchain immutability and transparency.

Read More: Ethereum Classic Price Prediction

Is It Worth Investing In Ethereum Classic In 2021?

Ethereum Classic is definitely worth considering in 2021. Note that Ethereum Classic is currently ranking #54, as per Coin Market Cap.

For those who believe in the Code is Law principle, Ethereum Classic is a great investment. Though Ethereum Classic can’t compare to Ethereum in terms of market cap, trading volume, and market sentiment, Ethereum Classic is considered by many the original Ethereum.

Ethereum Classic is also trying to establish itself as a major player in the Decentralised Finance (DeFi) space, which is one of the faster-growing sectors today. 

Note that Ethereum Classic released Wrapped ETC, a token to allow ETC holders to participate in Ethereum-based DeFi services.

As James Wo, founder of Ethereum Classic Labs, said: “We wanted to make sure ETC could go to a different ecosystem and use different applications on top of that ecosystem. I expect at least 10% of ETC holders will want to participate and use WETC.”

That said, ETC is still lagging compared to Ethereum and other smart contract giants, such as EOS, NEO, and Polkadot in terms of market value and institutional interest.

Thus, always consider the risk-reward profile of ETC before you start buying or trading ETC. Do not forget that cryptos can be also highly volatile and risky, so never invest more than you can afford to lose!

Should I Invest In Ethereum Or Ethereum Classic?

While Ethereum Classic is definitely worth watching, the truth is that Ethereum is the leader in smart contract deployment. As stated above, Ethereum is ranking second in terms of market cap and adoption, only after Bitcoin.

Ethereum is considered by many the authentic Ethereum. No surprise that Ethereum - with charismatic Vitalik Buterin in charge - is a leading supporter of a wide range of projects and partnerships within the dApp ecosystem. 

Let’s not forget that it was Buterin who created Ethereum in 2015 to enhance the use of blockchain technology far beyond peer-to-peer payments. As he said, if Bitcoin acts as a pocket calculator, then Ethereum is like a smartphone!

That said, Ethereum Classic keeps expanding and many believe that if Ethereum’s transition to proof-of-stake doesn’t work, Ethereum Classic may become a major back-up platform.

 In the end, there’s no such thing as a 100% safe asset, so one should always analyse the risk-reward potential of the coin they are interested in.

Whether you decide to invest in Ethereum Classic or not, remember to allocate an amount you are comfortable with and never risk more than 1% of your funds on a single trade

As there’s no one-size-fits-all approach in the cryptocurrency sector, do not forget that you don’t have to put all your eggs in one basket. In other words, depending on your goals and experience, always aim to diversify your portfolio to reduce risks and maximise profits. 

And of course, choose a reputable broker that can help you start investing in cryptos today!

Conclusion: So, Is Ethereum Classic A Good Investment? 

With different advantages, such as its unaltered nature and limited supply that can enhance scarcity and demand, Ethereum Classic could be a good investment in 2021.

That said, Ethereum Classic is lagging compared to Ethereum in terms of user adoption, Initial Coin Offerings (ICOs), and DeFi growth. 

Even ETC Google searches lag behind compared to other coins. Google searches for Ethereum, on the other hand, are on the rise, “eclipsing search interest during the height of the last Ether (ETH) bull run” (as stated by Coin Telegraph).

Ethereum Classic is also a major target of online attacks, which is damaging to ETC’s image itself. Many believe that unless Ethereum Classic switches to proof-of-stake consensus, attacks may continue.

But hey: investing in ETC in 2021 is not a bad idea at all. All you have to do is analyse its risk-reward potential and decide for yourself if you should add ETC to your portfolio!

In the end, it’s only up to you to decide if you should invest in Ethereum Classic. Remember that apart from holding, you can also start trading ETC and take advantage of both upward and downward price changes.

Read Also: How to Invest in Ethereum Classic

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Key Points

  • Ethereum was launched in 2015 by visionary Vitalik Buterin who wanted to expand the use of cryptocurrencies and blockchain technologies beyond peer-to-peer payments.
  • Ethereum Classic was created in 2016 after a split within the Ethereum community following the infamous DAO hack.
  • Supporters of Ethereum Classic still believe that Code is Law and that blockchains shouldn’t be altered.
  • Ether is the native crypto of Ethereum Classic, denoted as ETC.
  • ETC reached its all-time high of $47.77 in 2017.
  • Ethereum Classic keeps introducing different updates in order to become more interoperable with Ethereum and other blockchains.
  • Thus, though ETC is currently ranking #51, Ethereum Classic is worth watching as prices may go up in the next few years.
  • That said, buying ETC or trading CFDs of crypto pairs remains risky, so always do your research and exercise due diligence. 
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