Ethereum Classic Is Cheaper and More Profitable Alternative to Owning Ethereum. Ethereum Classic (CCC: ETC-USD) was trading for $89 as of May 18, while Ethereum (CCC: ETH-USD) valued at $3,407. As you can see, Classic is a less expensive way to purchase Ethereum. ETC-USD offers minor distinctions in functionality and structure, but it is mostly a mechanism to invest in the larger token and hold more cryptocurrency. ETC-USD offers minor distinctions in functionality and structure, but it is mostly a mechanism to invest in the larger token and hold more cryptocurrency.
What about performance, though? After all, Ethereum has risen 367 per cent this year. According to Yahoo Finance, the value of ETH-USD at the end of the year was $730.37. It is worth approximately $3,407 as of this writing on May 18. This values it at 4.67 times the price on December 31, or a 367 per cent increase. (Remember, we have to subtract 1.0 or 100% to calculate the gain or upside.)
But look at this. ETC-USD ended last year at $5.70, according to Yahoo data. That means at today’s price of $89, the crypto is now 15.64 times the Dec. 31 price. That means its performance has been 1,464% (don’t forget to deduct the 100%).
So, this means that Ethereum Classic has significantly outperformed Ethereum, up 1,464% vs. 367%, respectively. That’s 4x better performance. What is going on here?
Ethereum Classic’s Standout Features.
Ethereum Classic, like Ethereum, runs smart contracts. It came because of a “fork” in 2016. A fork is a split between cryptocurrency developers. A programming and/or policy change is proposed that one group’s followers do not agree to follow.
The fork in 2016 was from a “dispute over how to best resolve a hack that stole over $50 million,” according to Decrypt.com. Ethereum Classic is a continuation of the original blockchain platform. According to its advocates, it is “free from external interference and subjective tampering.”
Ethereum Classic also has a limit of 210 million tokens. Ethereum does not have such a limit. According to Coinmarketcap.com, ETC-USD already has 116.3 million ETC in circulating supply. That represents 55.4% of its total.
So it is going to take before the token runs into a supply squeeze that would be anywhere near that of Bitcoin (CCC: BTC-USD). Bitcoin has 18.7 million issued and outstanding of its total 21 million total supply cap, or 89% of the total. Given that less than 11% of the total Bitcoin available can be mined, the supply squeeze adds to the upward price pressure on Bitcoin.
In late 2020, Ethereum Classic Labs enabled ETC owners to gain access to the fast-growing DeFi market (decentralized finance). They introduced “Wrapped ETC”, which will allow ETC owners to “stake” their tokens. This is where they agree to not trade the tokens for a specified period and receive interest payments in Wrapped ETC in return. In effect, it is a sort of like how a certificate of deposit works at a bank.
What To Do With Ethereum Classic
Some people believe that ETC tokens are a faster way to make money on the Ethereum blockchain platform. Its market capitalization is only $10.3 billion. The market capitalization of Ethereum is $395 billion. As a result, the value of ETC is only 2.6 per cent of the value of ETH.
Here is what I’m thinking. Assume that individuals will bid up the price of ETC to 10% of the price of ETH. This would give it a market capitalization of $39.5 billion. And, of course, by the time it happens, ETH will have risen by at least 50%. As a result, it has a market capitalization of $60 billion (i.e., 10% of $600 billion).
Let’s say it takes three years for this to play out. That implies a 482.5% gain over three years and represents a great ROI for most investors. On an annually compounded basis, the ROI is 79.9% each year for three years. That would be 9x faster than ETH’s 50% gain.
Given how far and fast Ethereum has risen this year, and the apparent “catch-up” out performance by ETC as well, this seems doable. Therefore, many investors in Ethereum will probably consider diversifying some of their future ETH purchases by buying ETC instead.