On Wednesday, Ethereum Classic achieved its highest level in close to three weeks, supported by Barry Silbert-backed Digital Currency Group’s $50 million investment and an overall cryptocurrency market recovery steered by Bitcoin. Ethereum Classic, which is the 16th largest crypto by market value traded at a high of $63.19, close to 98% increase from its June 22 low of $31.91. Consequently, the market value of all Ethereum Classic tokens in circulation of $7.53 billion.
Digital Currency Group made the announcement of its intention to invest in Ethereum Classic on June 21 by authorizing the purchase of more than $50 million worth of shares of Grayscale Ethereum Classic Trust (OTCQX: ETCG). Grayscale is a New York-based investment firm providing accredited investors access to digital currency products in the form of traditional securities.
A Dark Past for Crypto Market
On June 21, the day of the reveal, Ethereum Classic experienced a 22.56% fall just like most other cryptocurrencies. The market large fall was a response to the increased crackdown in China on the regional crypto sector, including a complete ban in mining activities.
As a result, there was a heavy sell off of digital assets, further affecting price. Despite this, the market bounced back one token after the other. As Bitcoin slipped below $30,000 for the first time in months, traders were quick to sieve the buying opportunity. Due to altcoins high connection with Bitcoin, they tailed the leading asset to also record rise in price.
For instance, data from Crypto Watch indicated that the 30-day correlation efficiency between BTC and ETH was 0.88 on Wednesday. A reading of 1 represents a perfect positive correlation between two assets. ETC’s gains also appeared in days leading up to a major Ethereum Classic blockchain upgrade in July.
Ethereum Classic Upcoming Hard Fork
Ethereum Classic is a result of a hard fork of Ethereum through a controversial blockchain split following a $150 million hack on the Ethereum-based DAO project in April 2016. From the hard fork, Ethereum classic has multiple development teams including IOHK, ETC Cooperative and ETC Labs, most of which are focused on providing scaling solutions. The development teams are also tasked with improving development tools and promoting cross-chain transactions such that other projects can build on Ethereum Classic.
Steph Lohja, the lead developer at Mantis IOHK announced on June 10 an impending upgrade on Ethereum Classic with a hard fork called Magneto. The upgrade would also include earlier Ethereum Berlin upgrade features. This hard fork is expected to go live in July, in sync with Ethereum’s London upgrade scheduled for the same period.