It would be an understatement to say 2020 has been a rough year for Ethereum Classic (ETC).
Just over a year ago, ETC was comfortably positioned in the Top 25 cryptocurrencies on CoinMarketCap. In the early months of 2020, it even managed to push its way into the Top 10 as the price exploded.
Now the original Ethereum project currently sits at #37 on CoinMarketCap. Ouch!
The primary cause for such a drop? Three back-to-back 51% attacks against the Ethereum Classic network.
Within a month following the network attacks in July and August 2020, the price of ETC dropped nearly 30 percent.
Granted, its hard fork sibling Ethereum also experienced a 15 percent decline over the same time period, but such a substantial drop cannot be ignored – especially considering this wasn’t the first time the network came under a 51% attack.
It’s understandable why some investors may be content keeping ETC out of their portfolios. But in spite of these attacks, which continue to call network security into question, Ethereum Classic persists.
Why Ethereum Classic?
Ethereum Classic maintains a core group of supporters and developers who continue to build upon and improve the network.
To improve network security, ETC developers recently released the Thanos hard fork upgrade to make improvements and further incentivize miners to join the network. More miners should mean stronger network security moving forward.
Holding on to the beliefs that resulted in the Ethereum hard fork in 2016, the ETC network and its tight community remains dedicated to its founding principles of decentralized governance and transaction finality.
As such, advocates of the project stand by the decision to remain a Proof-of-Work cryptocurrency with no plans of transitioning into a Proof-of-Stake network like Ethereum (ETH).
And for what it’s worth, cryptocurrency investment giant, Grayscale, counts Ethereum Classic among the handful of cryptos within its institutional portfolio.
With over $81 million invested, Grayscale Ethereum Classic Trust is the company’s third largest holding, only behind Bitcoin and Ethereum (ETH).
Which finally brings us to the question…
Is Ethereum Classic a good investment?
Potentially. Outside of network security, the biggest red flag for ETC is its steady drop in value relative to the crypto king, bitcoin.
Even as much of the crypto market continues to rise in valuation relative to bitcoin, ETC has seen its price relative to bitcoin continue a steady drop throughout 2020.
For many, this is reason enough to avoid ETC. But to be fair, ETC is not the only major crypto facing this issue as bitcoin continues to test its all-time high amid the increase of major institutional investor attention.
So if the disparity between bitcoin and ETC doesn’t bother you, then it may be a good investment for you to consider as the crypto space explodes this bull cycle.
Following the 2020 network attacks, the ETC price appears to have bottomed out and more or less continues to hold steady relative to its wild ride earlier in the year.
Even with all it’s been through, ETC is still up relative to where it was in December of last year and its trading volume is as high as it’s ever been.
So when is a good time to buy?
Ethereum Classic has fallen considerably from its 2017 peak of $48. But with the recent Thanos upgrade and some renewed investor interest, it’s not unreasonable to think ETC may soon surpass $8 and prepare to retest $12 by the end of 2021.
Following over a month of consolidation after its September price drop, ETC experienced a nice rally in November. It’s currently holding at a line of support right around $6 and will likely remain there through the end of 2020.
That said, there are good technical indicators for buying ETC now.
To buy or not to buy?
Ultimately, it’s up to you what to do.
An investment in Ethereum Classic is going to boil down to your own appetite for risk – or your belief in ETC as an important, decentralized Proof-of-Work cryptocurrency.
Either way, Ethereum Classic is a crypto to keep an eye on as we head into the upcoming bull market. Regardless of whether you choose to buy now or later, every investor ought to watch this hidden gem closely in 2021.
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