Bitcoin and Ethereum clones jump on market bounce

Cryptocurrencies rose across the board on Thursday, with the overall crypto market gaining 7.1% on the day. Old fork coins from industry leaders lead the way.

Bitcoin and Ethereum Forks Lead Rally

Despite sharp interest rate hikes and ongoing fears that the US has entered a recession, the cryptocurrency market is on the rise today.

The global cryptocurrency market capitalization has risen by 7.1% today, with Bitcoin and Ethereum among the top performers. Ethereum Classic, the original Ethereum chain that fell in the fallout from the 2016 DAO hack, has significantly outperformed Ethereum in the rally. According to data from CoinGecko, Ethereum Classics ETC is changing hands at $33.46 after rising 22.9% on the day, while Ethereum is up 11.2%.

One reason for Ethereum Classic’s rise could be Ethereum’s upcoming transition to Proof-of-Stake, otherwise known as “the Merge”. The long-awaited update is currently scheduled to go live in mid-September, and Ethereum’s mining difficulty is increasing as the date approaches. This makes it less profitable for miners to maintain the network. The merger will also make mining hardware redundant as Ethereum will rely on validators instead of miners to verify transactions. As a result, Ethereum miners have slowly transitioned to mining Ethereum Classic, creating a perceived demand for the ETC coin. The “original Ethereum” also gained traction after AntPool, one of crypto’s largest mining pools, announced a $10 million investment to support its ecosystem on Wednesday.

Several 2017-era Bitcoin forks that rose to prominence during the crypto’s 2017 market rally have seen similar price movements to Ethereum Classic. Bitcoin Gold’s BTG has passed $26.78 after gaining 22% today, Bitcoin Cash’s BCH has reached $144.10 after gathering 22.3%, and Bitcoin SV’s BSV has reached $61.41 after a 13.3% increase . Bitcoin, which has a larger market capitalization than all the forks combined, has risen 8% over the same time frame. While no apparent fundamental catalysts have driven the rally, miners’ increased interest in older Proof-of-Work coins ahead of the merger may be a factor.

The cryptocurrency market has seen increased volatility in both directions over the past week, largely due to dried-up liquidity and the impact of worsening macroeconomic conditions such as sharply rising interest rates and slowing economic growth on asset and capital markets risk. After today’s surge, the global crypto market capitalization is around $1.1 trillion, about 65% less than the November 2021 peak.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

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