Also-Ran Ethereum Classic Catches Up Amid Crypto Market Frenzy, Hits Record

Bull frenzy grips crypto markets as the hunt for yield goes beyond bitcoin and ether.

AccessTimeIconMay 5, 2021 at 1:54 p.m. UTC
Updated Sep 14, 2021 at 12:51 p.m. UTC
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Cryptocurrency markets are witnessing such a bull frenzy that some also-ran tokens like ethereum classic (ETC), left behind during last year's rallies in bitcoin (BTC) and ether (ETH) , are getting a fresh look from speculative traders and mooning to previously unthinkable levels. 

The Ethereum Classic blockchain split from better-known Ethereum as part of a contentious "hard fork" in 2017. Last year, as enthusiasm mounted over the potential growth of decentralized finance, or DeFi, prices for ether, Ethereum's native cryptocurrency, quadrupled. Bitcoin, the largest cryptocurrency doubled. Ethereum Classic's token, ETC, gained just 26%. 

Now, in 2021, cryptocurrency prices are surging across the board; the doggie-themed joke token dogecoin (DOGE) has increased a laughable-if-it-weren't-true 117-fold. And ETC is joining the hunt, jumping 15-fold in digital-asset markets this year to a value of nearly $12 billion. 

ETC hit a record high around $150 on Wednesday and was changing hands near $105 at press time. Dogecoin also hit a new lifetime high of $0.69 early today. However, at press time, the joke cryptocurrency was up just 14%, while ETC was up 43%, as per CoinDesk 20 data.

That's despite few major cryptocurrency investors or analysts regularly mentioning the network as one of several potential "Ethereum killers" – upstart blockchains like Cardano, Polkadot, Solana and Binance Smart Chain that might provide alternatives to Ethereum for DeFi applications.

"It appears to be dominated by 'cheaper' ethereum play and retail flow that has pushed DOGE to sky-high levels," Denis Vinokourov, head of research at Synergia Capital, told CoinDesk.  

The ethereum classic token, now ranked 16th as per market value, has rallied by 128% in the first five days of May. Such a performance outruns even dogecoin, which has climbed 90% during the period and rose to a new record early Wednesday, at the meme-y price level of 69 cents.

Ethereum classic and dogecoin price performance
Ethereum classic and dogecoin price performance

Notably, ethereum classic may be getting an uplift from traders looking for an antidote against inflationary pressures as coronavirus-related restrictions lift – a theme that has drawn many big institutional investors to bitcoin.

According to Messari, pursuant to the Ethereum Classic blockchain's underlying coding, the ultimate supply of ETC will be capped at a maximum of 210.7 million tokens, and the pace of fresh supply gets reduced every time 5 million additional data blocks are added to the blockchain.

So the renewed interest in ETC could represent another side effect of the Federal Reserve's trillions of dollars of money printing since March 2020.

“You are seeing things in the capital markets that are a bit frothy, that’s a fact,” Powell said last week during a virtual press conference. “I won’t say it has nothing to do with monetary policy, but also it has a tremendous amount to do with vaccination and reopening of the economy.”

The wall of money from big institutional investors as well as retail traders looking for fast returns began flowing into crypto markets via bitcoin in October 2020. As a result, the top cryptocurrency has chalked up a sixfold rally in the past seven months, rising from $10,000 to record highs above $64,800. However, prices have steadied in the range of $50,000 to $60,000 over the past two weeks.

Lately, the buzz has turned to ether, which is now regularly pushing to new all-time highs. Since then, the second-biggest cryptocurrency by market cap has seen a steep rally from $2,100 to record prices above $3,500, with analysts attributing the bull run to Ethereum's solid organic growth.

And now all of a sudden, ethereum classic is becoming less of a punchline.


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