Analysts suggest that news of a planned investment trust based on Ethereum Classic (ETC) has driven its price up, but the token still has much to prove.
Emerging Interest in Ethereum Classic
A potential new investment vehicle is drawing broader attention to Ethereum Classic—a lesser-known cryptocurrency.
Dubbed the Ethereum Classic Investment Trust (tentative name), this product by Grayscale Investments—a subsidiary of Digital Currency Group (DCG)—would mark the first investment tool offering exposure to this blockchain asset.
Ethereum Classic originated as a contentious fork of Ethereum, the blockchain application platform launched in 2014. Since its creation in 2016, ETC has struggled for legitimacy, often facing criticism for lacking the original project’s promised capabilities.
Market Reactions
If approved, the trust could boost demand for ETC, applying upward pressure on its price. Petar Zivkovski, COO of leveraged trading firm Whaleclub, believes the trust would "undoubtedly" enhance the cryptocurrency’s standing:
"Price suppression in any cryptocurrency largely stems from a lack of legitimacy and mainstream access—e.g., via traditional investment vehicles. DCG’s trust would address both."
However, traders remain divided.
Skepticism Persists
Despite recent price surges, some analysts warn the rally may be short-lived.
- Arthur Hayes, BitMEX CEO, argues the trust might struggle to gather sufficient assets under management (AUM) to sustain price impact:
"This seems a classic ‘buy the rumor, sell the news’ scenario. Future price appreciation hinges on the fund’s marketing success." - Tim Enneking, Chair of crypto hedge fund EAM, calls it a "serious attempt" but urges caution.
- Jacob Eliosoff, an algorithmic trader, highlights ETC’s unproven ecosystem, noting most original Ethereum developers still work on Ethereum’s blockchain. He criticizes the trust for failing to address organic growth needs:
"Whales can defend price floors, but long-term success requires developer and user adoption—currently absent."
Price Momentum
ETC has maintained momentum since the trust’s announcement.
- Price Range: $1.37–$1.40 (post-announcement).
- Peak: $1.46 on Sunday (January 21).
Zivkovski interprets the minor pullback as bullish:
"The dip reflects speculative profit-taking, not a structural decline. This bodes well for coming weeks."
FAQ
1. What is Ethereum Classic?
Ethereum Classic (ETC) is a hard fork of Ethereum, preserving the original blockchain after the 2016 DAO hack.
2. Why is the investment trust significant?
It provides institutional exposure to ETC, potentially increasing liquidity and legitimacy.
3. What are the risks of investing in ETC?
Limited developer activity, competition from Ethereum, and reliance on speculative demand.
4. Could the trust’s approval stabilize ETC’s price?
Short-term yes, but long-term stability depends on network adoption.
5. How does ETC differ from Ethereum (ETH)?