Ethereum Classic Becomes Fifth Largest Cryptocurrency, Briefly Beats NEM, Litecoin
Ethereum Classic has become the fifth largest cryptocurrency in the world after surpassing the market cap of Litecoin. Briefly, Ethereum Classic also overtook NEM, the fourth largest cryptocurrency with a significantly high daily trading volume.
The daily trading volume of Ethereum Classic remains larger than Ripple and NEM, the third and fourth largest cryptocurrencies behind Bitcoin and Ethereum, at $326 mln. In fact, Ethereum Classic’s daily trading volume is 17 times larger than that of NEM.
Over the past few months, Ethereum Classic has enjoyed an explosive growth in demand and daily trading volume primarily due to two major driving factors: the debut of the Ethereum Classic Trust and the integration of ETC by leading digital currencies.
On April 24, Barry Silbert-led Digital Currency Group, arguably the most prominent investment firm within the Bitcoin and Blockchain industries, launched the Ethereum Classic Trust to provide a platform for accredited and institutional investors to invest in ETC via a regulated channel.
Since then, Ethereum Classic has experienced an overall increase in demand, price, market cap and trading volume. By April 1, Ethereum Classic’s market cap was around $200 mln. In less than two months, the market cap of Ethereum surged by over seven times, to $1.45 bln.
Furthermore, South Korea’s largest digital currency Bithumb and several other exchanges in the Chinese exchange market added support for Ethereum Classic, providing a platform for cryptocurrency investors in Asia. Bithumb’s integration of Ethereum Classic was particularly beneficial to Ethereum Classic’s growing market cap as South Korea operates the largest Ethereum exchange market in the world, with 35 percent of the market share and a $296 mln daily trading volume.
Key difference between Ethereum Classic and Ethereum
Ethereum Classic made a huge step forward in March when it executed a hard fork to integrate a deflationary monetary policy in contrast to Ethereum. Currently, Ethereum operates on an inflationary monetary policy which produces 13 mln new Ethers annually.
Ethereum Classic moved on from Ethereum’s existing inflationary monetary policy to Bitcoin-like fixed supply.
BitNovosti.com owner and Ethereum Classic movement founder Arvicco emphasized the importance of rarity and scarcity in cryptocurrency.
“Platform token is a critical part of blockchain system that aligns economic incentives of key stakeholders, users, developers, investors, and miners. Its monetization makes everything tick and helps to bootstrap the ecosystem. However, it has been shown time and again in economic history that reliable long-term monetization is impossible without two key characteristics; utility and scarcity.”
If the demand toward Ethereum Classic in major markets such as South Korea and the US continue to sustain, the price of Ethereum Classic is likely to rise throughout the next few weeks. More importantly, the increase in the demand toward Ethereum could also benefit Ethereum Classic for investors who see value in ETC’s fixed supply and actual currency-like attributes.