Ethereum Classic (ETC) up 50% in 3 days: What’s powering the crypto rally?

Highlight:

• In the last three days, ETC has rallied from US$27 per token to US$40.63.
• At the time of drafting, ETC was trading at US$38.27, up 14.13% in the last 24 hours.
• Trading volume in ETC has soared by 153% to US$3.47 billion in the last 24 hours.

Ethereum Classic (ETC) crypto has been on a tear since Friday and in the last three days, ETC has gained a massive 50% -- from US$27 per token to US$40.63 today. At the time of drafting, ETC was trading at US$38.27, up 14.13% in the last 24 hours, according to data available on CoinMarketCap.

Worth mentioning here is that this crypto is moving inverse to Ethereum (ETH) and Bitcoin, which were trading 2.3% and 1.5% lower respectively in the last 24 hours.

Before exploring the reason behind the recent rally in ETC, let us understand what ETC is?

Ethereum Classic (ETC) Up 50% In 3 Days: What's Powering The Crypto Rally?

What is Ethereum Classic (ETC)?

Ethereum Classic (ETC), a hard fork of Ethereum, is a decentralised, blockchain-based open-source computing platform. Launched in July 2016, it allows developers to build and deploy smart contracts with the ability to host and support decentralised applications (DApps). ETC is the native token of Ethereum Classic.

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The ETC network is permissionless, which means anyone having a compatible wallet can join and execute transactions. It was formed due to an ideological and technical split within the Ethereum community, following the DAO (Decentralised Autonomous Organization) attack.

For the uninitiated, a German startup named Slock.it launched its DAO project on Ethereum in 2016. This project was known as "The DAO". The project raised over US$150 million in crowdfunding, but hackers exploited a loophole in its smart contract and stole US$50 million. Following this attack by hackers, most Ethereum users, including founders Vitalik Buterin and Gavin Wood, supported a radical change in Ethereum blockchain’s base protocol (also known as a hard fork). This resulted in the creation of a new Ethereum (ETH) chain.

However, a part of the Ethereum community opposed the fork and decided to stand by the principle of “Code is Law”. They remained on the old chain and renamed it as Ethereum Classic (ETC), with the view that blockchains cannot be bent according to human whims.

It is also regarded as the "original" Ethereum crypto as it preserves the old code of the Ethereum blockchain.

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What is behind the recent ETC rally?

While the exact reason behind the recent rally in ETC crypto is still unknown, one possible reason is that cryptocurrency miners are probably making a switch to Ethereum Classic, ahead of Ethereum completing its transition to a proof-of-stake protocol. This is because Ethereum Classic has vowed to remain a proof-of-work crypto due to its belief that the protocol offers maximum decentralisation and security. It may be noted that this transition is expected to happen by the end of the second quarter of 2022.

According to CoinMarketCap, which ranks the crypto at 29th place based on its market capitalisation of US$5.1 billion, trading volume in ETC has soared by 153% to US$3.47 billion in the last 24 hours.

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