By Shelly Melancon (Switzerland)
The Digital Currency Group (DCG)’s $55 million investment into Ethereum Classic (ETC) has caused the digital currency’s price to attain a 3-week high. The investment also positively impacted the wider cryptocurrency market as all the digital assets, led by bitcoin, are on an upswing.
ETC rose as high as $63.20, representing about a 98.5% increase within eight days when it traded at $31.20. Also, ETC’s market value surpassed $7.54 billion.
Digital Currency Group Receives Approval to Make the Purchase
Nine days ago, the venture capital company announced that it had received the approval to buy $55 million worth of grayscale Ethereum classic trust shares. Grayscale is an acknowledged leader in virtual assets management and cryptocurrency investing. It enables accredited investors to access various crypto-related products through traditional securities.
Even though ETC decline by 23% when the announcement was made, other cryptocurrencies also declined. The cause of the decline was the continued clampdown on the crypto space by Chinese authorities, especially the forceful exit of crypto miners.
However, the entire crypto market is rallying back gradually. Some day traders entered the BTC market around the $30,000 level. This level is the recognized support level for the BTC/USD pair and has prevented the pair from a further downward bias.
BTC price fluctuation since May 19. Source: TradingView
Also read:In contrast, altcoins slightly followed the bitcoin rebound because of the high correlation between them and the leading digital currency. A Cryptowatch data revealed that the 1-month correlation between BTC and eth was 0.84 as of yesterday. When this correlation efficiency reads one, then the two assets have a perfect positive correlation.
ETC Value Rises with Blockchain Upgrade Looming
There would be a significant ETC blockchain upgrade next month, and the ETC price seems to be rising to that effect. Ethereum classic differs from Ethereum in multiple ways. One such way is the inclusion of various development teams such as ETC labs, ETC cooperative, and IOHK.
Even though other projects are allowed, the focus of these teams is to offer scaling solutions. Projects that promote cross-chain transactions and enhance development tools are also of importance to the ETC blockchain project.
The goal of the ETC proposals is to reduce gas fees and enhance the blockchain’s security. It is worth noting that ETC’s hard fork upgrade and Ethereum’s London upgrade will take place at almost the same period next month. Part of the features of the ETC upgrade would be the Ethereum Berlin upgrade.
How ETC was Formed
Ethereum classic was launched in April 2016 and was a result of a highly disputed blockchain split following a $150 million hack on an Ethereum-built DAO project. Vitalik Buterin proposed a ledger rewrite that would depict Ethereum as a centralized blockchain and clear off any record of the attack on Ethereum.
However, some members didn’t support this proposal. When the supporters and the opposition of the proposal couldn’t reach a compromise, each agreed to form separate but competing blockchains, with one of them being Ethereum classic (ETC).
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