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Classic ethereum (ethereum-classic” target=”_blank” rel=”noopener”>ETC) saw a 37% increase in the last seven days.
Observers note that the rise is likely due to investors anticipating that the U.S. Securities and Exchange Commission will consider applications for an ethereum (eth) exchange-traded fund (ETF). On January 10, the agency approved spot bitcoin ETFs.
However, SEC Chairman Gary Gensler cautioned that the btc ETF's green light should not be interpreted as a sign of the agency's willingness to give eth the same treatment.
Still, ethereum Classic witnessed a surge of over 35% this week. The altcoin is changing hands for $26.65 at press time, with a market capitalization of $3.8 billion, according to data from CoinGecko. This upward movement has been attributed to increased trading volumes and the hype surrounding the approval of the ethereum ETF.
The rapid rise of ethereum Classic seems somewhat inexplicable given the moment. Some skeptics argue that ETC's rapid rise is a preview of an upcoming fork later this month.
It is speculated that this hard fork will improve the alignment of the network's EVM with that of ethereum, potentially attracting projects to collaborate with the chain.
Adding to the context, the network's hashrate surged to all-time highs after ethereum moved to proof-of-stake in late 2022. Former ethereum miners redirected their GPU mining rigs to ethereum Classic, seeking an alternative income stream, thus contributing to the growth of the network. higher hashrate.
Even though ethereum Classic's post-merger hash rate remains relatively stable, the network records only about 30,000 transactions per day, roughly bitcoin Cash's baseline. However, ethereum Classic's hashrate is less than 15% of what ethereum recorded just before the merger.
By contrast, ETHPoW, the ethereum hard fork started around Merge to compete with ethereum Classic, currently operates at about a tenth of the latter's hashrate.
However, market reactions seemed to anticipate the SEC's unofficial announcement, selling the news prematurely, while also speculating on possible ethereum ETFs.
BlackRock CEO Larry Fink also expressed support for the idea of introducing an ethereum-based ETF, following the launch of the highly anticipated bitcoin ETF.
Paving the way for eth approval
A spot bitcoin ETF allows everyday investors to access the world's largest cryptocurrency without direct purchase. This landmark decision has potential implications for the approval of Ether spot ETFs in the future.
The green light for bitcoin ETFs could position bitcoin as a potential fixture in 401(k) plans, IRAs, and pension plans, encouraging widespread acceptance.
Since the announcement, the price of bitcoin has seen immense volatility and in early 2024, it surpassed $47,000, its highest level in almost two years, according to data from CoinGecko.
Large asset managers like BlackRock that have expressed interest have encouraged other asset managers to follow suit.
The SEC's approval of bitcoin ETFs covers several companies, including Ark Invest and 21 Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Hashdex, Invesco, WisdomTree, Valkyrie, and VanEck. Some of these ETFs began trading shortly after their approval, with Grayscale, BlackRock and Fidelity dominating trading volumes.
Looking ahead, the SEC is expected to make decisions on Ether ETF spot applications starting in May. BlackRock, along with Invesco, Ark, VanEck and Grayscale are among the companies seeking approval.