If the price of ethereum classic (ETC) was treated roughly by the market at the end of October, it didn’t fare much better in November. True, it regained most of the 12% it had lost and possibly took comfort in reaching $64.94, but that was only to see it drain away again until it reached its current level (29 November) of $47.52. It is now some way off its $134 peak in May.
On the other hand, the price of ether (ETH) positively glowed in October and into November, rising 75% to a new all-time high of $4,859.90. Some of that lustre may have fallen away since as the price currently sits at $4,344.80.
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So, what is the difference between ETH, which runs on the Ethereum blockchain, and ETC? And what has been driving the value of ethereum classic so far in 2021?
This article looks at the latest developments in the ETC cryptocurrency and the predictions for its price over the long term.
Original Ethereum blockchain diverges after split
The Ethereum blockchain was launched in 2015 after two years of development by co-founders Vitalik Buterin and Gavin Wood along with Charles Hoskinson and Anthony Di Iorio.
Ethereum Classic was created from a hard fork, or split, in the Ethereum blockchain in July 2016 when the blockchain’s participants disagreed over how to respond to a hack of the decentralised autonomous organisation (DAO) that resulted in the theft of 3.6 million ether coins.
Ethereum Classic is a continuation of the original blockchain, as it did not revert the blockchain to cancel out the impact of the hack. The participants held to the principle that “code is law”, while what is now the Ethereum blockchain was created by the split. Miners and exchanges supported both the blockchains, allowing the Ethereum Classic legacy network to continue with ETC as its native coin.
The two blockchains have diverged as the Ethereum blockchain moves towards a series of updates to create Ethereum 2.0, including a shift from the proof-of-work (PoW) algorithm to proof-of-stake (PoS) mining algorithm.
There are no plans for Ethereum Classic to convert to PoS. There is also no official development team for Ethereum Classic, instead several development groups are working on updates to the open-source code. Recent attacks have affected the ecosystem, prompting blockchain infrastructure research and engineering company IOHK, which was founded by Charles Hoskinson, to launch the Mantis project to roll out upgrades and support the community.
Ethereum Classic operates as a smart contract network and can host decentralised applications (dApps). As the ETC price rises, the rewards miners receive for verifying blocks increases, incentivising more miners to join the network and increase its network security.
As activity on the Ethereum Classic blockchain fell, it became more vulnerable to attack. In January 2019, there was a double spend of $1m in ETC on the Coinbase cryptocurrency exchange in a 51% attack, which can only occur if one entity or collective owns at least 51% of the network. Coinbase and several other exchanges paused ETC transactions, and the price dropped in response.
ETC price hikes to fresh high in 2021
One ETC was worth $2.08 when the blockchain split in July 2016. The price had fallen to $0.75 by November 2016, where it bottomed out. It then trended higher, accelerating to reach $46 by December 2017. The subsequent crash took the price back down to $3.76 by December 2018.
After the 51% attack in January 2019, ETC rose steadily to reach $9.33 by June, then it dropped back to $3.54 at the end of that year. The price climbed to $12.34 in February 2020, its highest level since 2018. A broad sell-off in cryptocurrencies saw the price drop to $4.51 in March 2020, and ETC traded in a range between $4-$6 for the rest of the year.
Rallying cryptocurrency prices and the renewed development activity on the Ethereum Classic blockchain have lifted the ETC price sharply since the beginning of 2021. Emergency upgrades by the Core-Geth protocol provider and the relaunch of the Mantis Client have increased confidence in the stability of the blockchain. On 26 April, the NOWPayments cryptocurrency payments gateway added ETC.
The upgrade to the Ethereum blockchain offers opportunities for Ethereum Classic to pick up users that may prefer the previous version. The Mantis IOHK Twitter account tweeted ahead of the Ethereum hard fork on 5 August: “Ethereum’s move to PoS and Sharding may disrupt many in the community who prefer PoW and a strong base-layer approach to blockchain security. This is where #EthereumClassic becomes a viable alternative for #Ethereum projects to migrate to.”
On 24 July, Ethereum Classic executed a hard fork called Magneto to implement a series of features from the Berlin hard fork on the Ethereum blockchain that happened earlier in the year, as these features offered network security enhancements.
The ethereum classic price peaked at an all-time high of $176.16 on 6 May this year, then dropped back sharply as the cryptocurrency rally ran out of steam and prices crashed. As with other crypto prices, the market bottomed out on 22 June, dropping to a low of $32.51.
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The ETC price rebounded to $62.01 on 30 June but dropped back to a low of $37.95 before starting a new rally. ETC reached $76.94 on 15 August, its highest level since the retreat from the May highs. October was a tough month with the price shedding 12% after an earlier surge in the month. At $47.67 on 29 November, it is 64% down from its $134 peak in May.
So, where next for the ethereum classic price? Will it retreat further or climb back to the previous heights?
Ethereum classic price prediction: will the price rebound?
CoinCodex’s short-term ethereum classic price prediction suggests the price will stabilise at $45.86.10 by 4 December. At the time of writing (29 November) the site’s technical analysis showed that with the ETC had support levels at $ 45.83, $ 44.21, and the strongest at $ 43.39 and resistance $ 48.27, $ 49.09 and $ 50.71. Its sentiment was bearish with 13 bullish technical indicators against 14 bearish.
For a long-term outlook, the ETC coin prediction from algorithm-based forecasting site WalletInvestor shows the price potentially holding firm to the $53.95 at the end of the year. It predicts that the price may reach $101.68 by the end of 2022 and more than double to $248.65 by the end of 2025.
DigitalCoin predicts the ETC price will average $73.49 in 2021. Its ETC forecast estimates the price could almost double from the 2021 average to reach $142.86 by 2025. Over the longer term, the coin’s value is forecast to average $212.94 in 2028.
The ETC prediction from Gov Capital puts the price of the coin at $46.7 by the end of December 2021, rising to $70.8 by December 2022 and $186 by December 2025.
The prediction for the ethereum classic future price from Coin Price Forecast is also bullish, more than doubling from $48.49 at the end of 2021 to $83.33 at the end of 2024 and $161.82 by 2030.
The ETC/USD forecast from Trading Beasts is seeing little growth, predicting an average price of $44.13 for December, stable at $47.21 in December 2022, $43.65 in December 2023 and $42.67 in December 2024.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and online forecasting sites can get their predictions wrong. We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decisions. And never invest more than you can afford to lose.
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