“Cheaper Ethereum” ETC Rises As Merger Goes Home
Important takeaways
- Ethereum Classic is up 11.5%.
- The “Cheaper Ethereum” Rises as Ethereum’s Proof-of-Stake Update Approaches.
- Ethereum miners have also flocked to Ethereum Classic, bringing the hashrate to new records.
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ETC and ETH have jumped 11.5% and 1% respectively on Monday.
Ethereum Classic Rally on Merge Hype
Ethereum Classic benefits from the anticipation of Ethereum’s landmark “Merge” event.
ETC rose 11.5% on Monday, rising from $32.12 to $36.10 at press time. The Ethereum fork has previously hovered between $30.90 and $33.90. According to CoinGecko data, ETC trading volumes have risen from around $265 million to $1.1 billion over the past 24 hours, suggesting that the breakout may persist.
While there is no clear driver behind Ethereum Classic’s rise, it is likely to benefit from Ethereum’s upcoming Proof-of-Stake upgrade. Dubbed “the Merge” by Ethereum enthusiasts, the highly anticipated event will see the number two cryptocurrency ditch its Proof-of-Work consensus mechanism in favor of Proof-of-Stake. Tentatively scheduled for September 15th, the merger is expected to reduce ETH issuance by 90% and make the network 99.9% more energy efficient.
The main asset that will be affected by the merger, ETH, also rose on Monday. It’s up about 1%, trading at $1,582 at press time. While ETH enjoyed a surge over the summer ahead of the event, ETC has also seen a wave of renewed interest. Unlike ETH, ETC also causes “unit bias” as the price per token is lower than ETH. This can lead to market participants buying into an asset without regard to market cap, which determines the overall value of an asset (Bitcoin has the highest market cap of any crypto, followed by Ethereum, and so on). Alongside repeated endorsements from Elon Musk, unit bias is what helped Dogecoin’s DOGE rise from fractions of a cent to $0.73 in 2021. As for Ethereum and Ethereum Classic, as one ETH is worth $1582, ETC is sometimes perceived like “cheaper Ethereum” .”
It is also worth noting that Ethereum miners will become obsolete after the merger, causing many to flock to the Ethereum Classic Proof-of-Work network. Since the market hit a bottom in late June, the network’s hash rate has more than doubled, posting an all-time high of around 47 terahashes per second (th/s) on Monday. This means that the network is now more secure than it has ever been.
Disclosure: At the time of writing, the author of this piece owned ETH, ETC and several other cryptocurrencies.
