An analytical guide to investing in Ethereum Classic in 2021
Where will Ethereum Classic price go in 2021?
What will happen to the ETC price in 2021? Since cryptocurrencies are decentralised, crypto investors have always wondered: What drives the Ethereum ETC price?
When we talk about cryptocurrencies, since they do not have a very long history because they are relatively new then many people, including investors, find it difficult to understand how they work. They find it hard to understand what drives their price also.
Bitcoin was the first cryptocurrency to be released in 2009. Satoshi Nakamoto through a white paper announced to the world that he launched his project called Bitcoin. Of course, now that we are in 2020, few people thought that Bitcoin, along with other cryptocurrencies, would become serious competitors in the world of finance. In fact, cryptocurrencies now have the potential to change the way money works. If it does not happen now, it is likely to happen in the not too distant future.
After the release of Bitcoin, many other cryptocurrencies were introduced, including the Ethereum Classic which was launched in 2016 when a hard fork appeared. So Ethereum Classic (ETC) is one of the newest cryptocurrencies as it has not been more than four years since it was launched (since the hard fork took place).
But what indeed drives the Ethereum Classic price?
There are two main factors that most affect the Ethereum Classic price:
- Ethereum Classic adoption
- Network attacks
Here at Trading Education, we analyzed these three factors and below we will show in detail what we found out.
Why Ethereum Classic?
Why should investors consider investing in Ethereum Classic? What makes this cryptocurrency so unique?
The Decentralised Autonomous Organisation (DAO) got hacked in 2016, and then it was decided to create a hard fork that would return the $50 million that hackers went away with. This hard fork is known as Ethereum, which is the second-largest cryptocurrency today. The original blockchain that remained is known as Ethereum Classic.
Actually Ethereum Classic uses Ethereum’s initial blockchain. Ethereum Classic runs smart contracts, and it has its own cryptocurrency known as ETC. Ethereum gets most of the attention, but Ethereum Classic should not be left out either because it plays a similar role to Ethereum, having its ecosystem of decentralised applications (DApps) and blockchain ledger.
Throughout its history of existence, Ethereum Classic has had its ups and downs, showing that it is a volatile asset and has the potential to offer profits to investors. The coin had its all-time high of $44.34 on January 14, 2018.
But compared to some other cryptocurrencies like Chainlink or Cardano, Ethereum Classic has not had significant growth. Currently, the ETC price is $5.98. Moreover, since the all-time high, Ethereum Classic has generally only declined and has never been able to get near the $44.34 price that it had reached in January 2018.
However, forecasters predict that the price of the coin could increase in the future. Therefore, Ethereum Classic can be a good investment for investors.
Ethereum Classic all-time price movements. Source: Coinmarketcap
Would you consider investing in Ethereum Classic ETC?
What Drives Ethereum Classic Price?
There are 116,313,299 ETC circulating right now. The total supply is 210,700,000 ETC. The total market cap of Ethereum Classic is $701,289,812
Various factors can drive the price of a coin
2 Factors will drive the Ethereum Classic price in 2021
Factor 1: Ethereum Classic adoption
Why didn’t Ethereum Classic perform well? Well, most ICO’s are built on Ethereum’s network, so most of the developers prefer building apps using Ethereum’s network instead of Ethereum Classic’s one. So, Ethereum Classic has poor user adoption, and it is under Ethereum’s shadow.
Moreover, there are many Defi projects out there that have a value of more than $14bil.
50 of these projects that are tracked by Defipulse are built on Ethereum’s network.
As elaborated in the table below, some of these popular platforms are Maker, WBTC, Yearn Finance, Aave, Compound, etc.
10 of the 50 platforms that are built on Ethereum’s network. Source: Defipulse
So since developers trust Ethereum's network more to build their apps and DeFi projects are built on Ethereum's network, Ethereum Classic has remained in the shadows. Consequently, its price could not experience a significant increase, as there was no notable demand for ETC.
Factor 2: Network attacks
The reputation of Ethereum Classic has also been damaged as a result of the 51% attacks it has suffered during its existence. In essence, a 51% attack means that a miner can control 51% or more of hashing power, thus creating longer blockchains and double-spending.
51% attack (double-spend) elaborated. Source: Hackernoon
On January 5, 2019, Coinbase froze Ethereum Classic from trading after noticing that ETC is experiencing such an attack.
Later, in August 2020 Ethereum Classic experienced three attacks within the month.
In this attack, according to the mining company Biftly, 7,000 blocks, or two days worth of mining were reorganized.
These attacks have caused insecurity among investors, and some of the crypto exchanges have reacted. Even OKex crypto exchange, for example, has stated that after these attacks they will consider removing ETC from their trading list.
Also, cryptocurrency derivatives exchange FTX have said they will “reconsider its ETC perpetual futures contracts”, as reported by Coindesk.
After the attacks, ETC Cooperative, a foundation that supports the network development tweeted saying that they are working with others to test and appraise recommended solutions.
On October 13 2020, Coingeek reported that Ethereum Classic had started to take measures and implement a 51% attack defence. According to the report, the network has implemented the Modified Exponential Subjective Scoring (MESS) system to protect against 51% attacks.
Later, on November, Ethereum Classic launched the hard fork called “Thanos”, with the goal to increase miner cooperation and improve security.
How To Invest In Ethereum Classic For 2021?
Although the Ethereum Classic may not have had a good year, forecasters are optimistic when forecasting prices for this coin, given the measures taken to increase security.
But how much can the price of Ethereum Classic go in 2021?
Trading Beasts have a “realistic” approach predicting Ethereum Classic to reach $7 by December 2021. Considering that at the moment of writing the price of ETC is $6 this would not be a massive increase although it would be a positive one.
Digitalcoin has a more positive approach, predicting the price of ETC to reach $11 in February 2021, recording an 85.39% increase.
It can be said that this is a realistic prediction from these forecasters. Considering that 2020 was not an excellent year for Ethereum Classic, it can be said that 2021 will be more positive according to forecasts.
Ready to invest in Ethereum Classic ETC?
Ethereum Classic Price Beyond 2021
Trading Beasts are not so optimistic when it comes to long-term predictions for ETC. According to them, Ethereum Classic’s price will stick around $7 even in 2023. But when we look at Digitalcoin’s long term price prediction for Ethereum, it is genuinely optimistic.
Digitalcoin, in this case, has more positive forecasts. In June 2023 they forecast ETC to reach $14.17. Further, as per their prediction, Ethereum Classic could reach $32.81 in February 2026 experiencing a 440.5 % increase.
What Is The Future Of Ethereum Classic?
Although Ethereum Classic may have had attacks which have slowed its growth process, it is still expected to serve as one of the key factors for decentralized finance (Defi) in the future, as a decentralized smart contract platform. Also considering the optimistic predictions above, we can say that Ethereum Classic has a genuine future and can be a good investment option for investors.
What Is The Difference Between Ethereum Classic And Ethereum?
Ethereum Classic is the original Ethereum, the one that existed before the fork happened. In 2016 a new fork was created due to a hack, and it was named Ethereum - the Ethereum that exists today. Right when the split happened, the battle between Ethereum and Ethereum Classic began.
They both offer the same function when it comes to building smart contracts and decentralized apps (dApps). However, Ethereum now is way more popular than Ethereum Classic, and it is supported more by investors and institutions as Ethereum Classic has lacked security.
Some of the key differences between Ethereum and Ethereum Classic are:
Ethereum has a yearly supply of 18mil ETH and has an uncapped total supply. On the other hand, Ethereum Classic has a total supply of 210 million ETC.
At the time of writing as per Coinmarketcap, Ethereum has a total market cap of $66,706,554,856, and it is ranked as the second cryptocurrency right after Bitcoin. At the same time, Ethereum Classic’s total market cap is $701,289,812, which is way lower than Ethereum’s.
Ethereum is way more popular than Ethereum Classic, and it got more developer support. Ethereum is the leading blockchain for ICO’s, and it holds 80% of the market share while Ethereum Classic is not so preferred for ICO’s. Investors support Ethereum more as it has better round functionality. Thus investor confidence is more prominent when it comes to Ethereum than it is for Ethereum Classic.
Should You Invest In Ethereum Classic?
Ethereum Classic still has its supporters who stayed loyal to the old blockchain. They believe that it is a better choice than the new one. Although in 2020, Ethereum Classic has not experienced significant growth, ETC might emerge in the future. Cryptocurrencies might have experienced drastic growth since the release of Bitcoin in 2009, but they are still in the early days of their development. Therefore, the supporters who stayed loyal to the old blockchain (Ethereum Classic) might be right, ETC could experience growth in the near future.
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Virtual currencies are highly volatile. Your capital is at risk.
- The Decentralised Autonomous Organisation (DAO) got hacked in 2016 which led to a creation of a hard fork that would split the existing Ethereum into Ethereum and Ethereum Classic.
- There are two main factors that most affect the Ethereum Classic price: Ethereum Classic adoption and network attacks.
- ETC had its all-time high of $44.34 on January 14, 2018.
- There are 116,313,299 ETC circulating right now. The total supply is 210,700,000 ETC. The total market cap of Ethereum Classic is $701,289,812.
- Developers trust Ethereum's network more to build their apps, and Defi projects are built on Ethereum's network. Consequently, ETC price could not experience a significant increase.
- The reputation of Ethereum Classic has also been damaged as a result of the 51% attacks, three of which happened only in August 2020.
- Trading Beasts have a “realistic” approach predicting Ethereum Classic to reach $7 by December 2021, while Digitalcoin predicts that ETC could reach $11 in 2021.
- The price of ETC can reach $32.81 in February 2026 experiencing a 440.5 % increase according to Digitalcoin.
- Some of the key differences between Ethereum Classic and Ethereum are in supply, market cap and investor confidence.
We hope this article has informed you about Ethereum Classic and has motivated you to start your investment in cryptocurrencies. Lately, cryptocurrencies have latterly begun to grow more with Bitcoin being a leader and being institutionalized.
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