Ethereum Classic price prediction 2020: charts aren’t bullish
12:06, 27 March 2020
Bitcoin is the most widely known cryptocurrency that typically dominates financial media, followed by Ether which is likely the second most popular. There are plenty of similarities between the two, most notably that both are digital currencies that investors can buy and sell on various exchanges, or hold for a longer period of time.
Since the price of one bitcoin is worth thousands of dollars, many investors are taking a closer look for alternative investment ideas that won't break the bank.
What Is Ethereum?
Ethereum was launched in 2015 and is an open-source and blockchain-based decentralised software platform that is used for its own cryptocurrency called ether. The purpose of Ethereum is to allow SmartContracts and Distributed Applications (DApps) that can be built by third parties. The main selling point of the platform is superior control and security compared to traditional methods.
Ethereum states its main purpose is to allow people to “codify, decentralise, secure and trade just about anything”. Multiple YouTube and educational videos offer step-by-step instructions on how anyone can create their own SmartContract.
SmartContracts are mostly written in Solidity, a coding language modeled by C++, Python and JavaScript. Vyper is the security-focused language that is mostly based on Python.
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Ethereum Hack
Prior to the creation of Ethereum Classic, there was just one entity simply called Ethereum. The split was the direct result of a hack on Ethereum’s Decentralised Autonomous Organisation (DAO) in 2015 that resulted in the theft of 11.5 million ethers, or around $50 million.
The DAO was at the time revolutionary in the financial universe as it was a decentralised investment fund without a few powerful partners dictating its direction. Instead, anyone who invested capital was given a say in which companies will benefit from the investment capital.
The Ethereum network and distributed structure implied no one would be able to steal funds. Of course, this was proven not to be the case as a thief or thieves were able to exploit a weakness in the Ethereum code.
One of the options available at the time was implementing a simple rollback and reversing all transactions, known as a “hard fork.” This would imply anyone who invested in the DAO would receive their cashback and the entire investment would be reversed as if it had never happened in the first place.
The debate begins
The concept of a “hard fork” was debated within the community. The main argument against it mostly came down to “code is law” and can’t be changed or reversed, regardless of what happens. They also argue that once a “hard fork” is used once it could start a slippery slope of future uses, even for less valid reasons.
On the other hand, those in favour of the “hard fork” emphasised the “code is law” stance must have exceptions, especially when it comes to the theft of tens of millions of dollars. Allowing a thief to keep the stolen money is not only immoral but if kept in the hands of a malicious party it could be used to create even more harm for the community.
A vote was taken and 89 per cent of stakeholders approved Ethereum's “hard fork” and this took place on July 20, 2016.
The remaining 11 per cent who were against the “hard fork” decided not to upgrade their software to account for the decision. This created an incompatibility in the network and a potential solution was the creation of the Ethereum Classic (ETC).
Ethereum Classic is fully independent from Ethereum (ETH) and acts individually. It offers identical features, most notably a focus on smart contract and Decentralised applications.
Ethereum Classic price prediction: where it falls short
There are some major differences that impact the Ethereum Classic price forecast for 2020 and beyond. Most notably, Ethereum Classic has no fixed yearly supply of new coins and has a total supply capped between 210 million and 230 million ETC. By comparison, ETH has an uncapped total supply and a fixed yearly supply of 18 million ETH.
Ethereum Classic is also at a major disadvantage as Ethereum has the full support of its original lead developers, including Vitalik Buterin and Joseph Lubin.
The disparity between the two couldn’t be more evident by comparing the corresponding market caps. At the time of writing, Ethereum Classic has a market cap of around $540 million versus around $13.8 billion for Ethereum. From a fundamental perspective, investors may prefer shying away from Ethereum classic in favour of the much larger Ethereum.
Ethereum classic price prediction 2020: what the chart says
Taking a look at the one-year chart for a better ETC price forecast 2020 did show some encouraging signs in prior months, but the same can’t be said as of late March. The chart shows a clear breakout at the start of the year from around $4.50 to north of $12 which marks a one-year high.
The coin attempted to break above $12 in late January/early February and once again in mid-February before losing all bullish momentum and falling back to $4. At the time of writing, the chart is showing a small breakout above $4 although it is unclear if it can retest its yearly highs, especially at a time when nearly every asset class is getting hammered by the coronavirus outbreak.
Taking a look at the long-term chart, there is little reason to support a case for Ethereum classic future price to return to prior highs. The price of ethereum classic coin traded above $40 when the entire cryptocurrency industry was benefiting from tremendous momentum. Aside from this anomaly, the coin struggled on many occasions to find any momentum above the $20 level and all short-term breaches were followed by a period of weakness.
Conclusion
Any ETC price prediction that it will surpass its larger rival any time soon, let alone return to its former glory days, would be foolish. ETC’s all-time high was $44.34 while ETH hit an all-time high of $1,402.54. Both coins have lost a lot of value since their highs, but the same can be said for nearly every cryptocurrency.
Still, the crypto market, including Ethereum Classic, is extremely volatile, which provides huge potential for speculation. Stay tuned to the latest cryptomarket news, which can drive ETC price movement.
Read more: Ethereum news in spring 2020: what's happening to this booming crypto project today?
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