Ethereum’s long-anticipated software upgrade has made the blockchain’s early offshoot an unexpected winner, pushing up the prices of the latter’s token in recent days.
Ethereum Classic, which was created after a 2016 software change known as a “hard fork” on Ethereum’s blockchain, saw its token’s price jump by as much as 29% on Wednesday.
Ethereum also rose by as much as 18% as the crypto industry awaits the blockchain’s biggest transition. A transition known as the Merge. This will take place in September after being delayed for several years.
Cryptocurrencies surged across the board on Wednesday amid a broad rally in risk assets. Bitcoin rose as much as 10%, the most in more than a month.
The Merge: From Proof-of-stake To Proof-of-work
The Merge is set to take Ethereum to a system called Proof of Stake. A system in which staked Ether tokens will order transactions, from its current system called Proof of Work. Proof-of-work is a mechanism which uses powerful computers to order transactions.
“If you want to cancel Proof of Stake, we are not going to cancel you… there’s Ethereum Classic, which is the original Ethereum,” he said. “It’s a very welcoming community and I think they’ll definitely welcome proof of work fans. It’s not even a joke. If you like proof of work, you should go use this original version. It’s a totally fine chain.”
Buterin’s comment has helped “drive speculation” among traders, Thomas Dunleavy, senior analyst at crypto research firm Messari, said.
The Ethereum based software, which still uses the Proof-of-Work mechanism, may be one of the biggest beneficiaries of Ethereum’s migration. The migration is expected to cut off earnings for as many as one million people. Miners who are looking for a platform for their costly mining equipment may turn to Ethereum-Classic.
But analysts remain skeptical of the fate of Ether’s sister token. Since its inception, Ethereum-Classic, has never gained a similar level of success as Ether. Its network has also suffered several attacks in the past.
“This seems like a trade more than an investment,” Dunleavy said. “I don’t think Ethereum has any long-term viability.”
Bitcoin And Ether Surge After Fed Rate Hike
The U.S Central Bank delivered as expected rising interest rates.
Consequently, the crypto market Shrugged, continuing their 2 days journey upslope. Bitcoin is the first to be noticed. The coin jumped by a serious 10% following the announcement from the Federal Reserve. Ether Soared by more than 15% at some point.
Bitcoin was recently trading at about $22,900, up over 8% for the past 24 hours. The largest cryptocurrency by market capitalization has mostly lingered between $21,000 and $23,000 for 10 days now. Ether was recently changing hands just above $1,600. It was up more than 15% over the same period. Other major cryptos spent much of Wednesday in the green. ETC up more than 30% and UNI and AAVE each rising over 20%.
Many market observers believed markets had already accounted for the Fed’s rate hike. A hike which the bank has been foreshadowing for over a week. “A lot of people are saying that the rate hike right now is baked in just because the Fed has telegraphed for quite a while. And even equity markets have been setting quite a bit.” Katie Talati, head of research at asset management firm Arca.