As the Ethereum merge approaches, many companies are starting to plan accordingly. FTX as an example is halting ETH deposits and withdrawals right before the merge time. Ethereum Classic on the other hand is witnessing a surge in its prices. In the past 24 hours, ETC increased by more than 20%. Why is ETC up? Is it a good idea to buy ETC before the merge? Let’s analyze what’s happening in the Ethereum space and analyze ETC in this ETC price prediction.
What is Ethereum Classic ETC?
As the name suggests, Ethereum classic came to be as a result of certain developers’ disagreements over how the Ethereum blockchain at the time operated. These programmers utilized Ethereum to build a venture capital fund under the name “The DAO (Decentralized Autonomous Organization). By allowing individuals to contribute ETH and guaranteeing them profit sharing as a ROI, this VC raised $100 million. Investors have the authority to decide how to allocate assets in addition to returns. Unfortunately, the fund’s coding included a flaw that allowed for a network breach. Millions of dollars were fraudulently taken out of the system during the breach in the form of ETH.
Before the hackers cashed out on the stolen tokens, investors started to worry and offered engineers a month to come up with a solution. In order to undo the hack and return investors’ money, engineers had to construct a hard fork. Others opposed this option, but Vitalik Buterin and many other significant network investors did. The fact that they believed it would be improper to tamper with a Blockchain’s ledger was one of the main grounds for the rejection. They wanted the network to keep running in spite of the theft because of this. They remained, though, and gave the network the new moniker Ethereum Classic. Most miners, developers, and consumers switched to the forked network, including Vitalik Buterin. The forked network is what we now know as Ethereum today.
Why is Ethereum Classic UP?
Ethereum is about to have a major upgrade in its blockchain. It is basically moving from PoW to PoS. This new consensus mechanism eliminates the need for miners to exist. That’s why most miners would look for other alternatives. Ethereum Classic is one of the closest blockchains to Ethereum, hence miners look at it as their “safe haven”. They all plan to move to Ethereum Classic, which will still operate with a proof of work mechanism. Now that the merge is near, miners are switching and prepping to move to other PoW mechanisms such as Ethereum Classic.
Additionally, Vitalik Buterin mentioned Ethereum Classic recently at a conference. He said that Ethereum Classic was “a fine blockchain”. People who still want to use it can safely do so. In fact, now that the mining volume would increase tremendously, it would make the Ethereum Classic blockchain much safer.
So to summarize: more miners flocking Ethereum Classic + Vitalik positive reassurances = higher ETC prices.
Ethereum Classic consolidated for around 1 month around the $30 price mark. Now that the merge hype is back, prices soared towards the next psychological target, the $40 price mark.
ETC Price Prediction – Is it good to Buy ETC?
If you want to invest in ETC, this means that you believe in PoW consensus mechanisms. Second, you anticipate some kind of chaos when the merge occurs, and believe that miners will switch to ETC. Those fundamental reasons should be good enough for you to invest.
However, from a technical perspective, now that ETC reached the $40 price mark, it can be a good buy zone. You could place a buy order and set a stop-loss trigger if prices fall below $37 in case things went south. However, the next target for ETC is the $50 price mark, which can yield a hefty 25%.
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