In the days leading up to the Merge update implemented on the main Ethereum (ETH) blockchain, cryptocurrency investors continue to show a growing interest in Ethereum Classic (ETC). The interest is underscored by the ETC purchasing pressure, resulting in a substantial influx of capital into the token.
In particular, the Ethereum Classic market capitalization went from $4.36 billion on September 5 to $5.61 billion on September 6, representing an inflow of $1.25 billion in the last 24 hours, according to data from CoinMarketCap.
This capital inflow means that ETC is trading at $41.10, up 28.1% in the last 24 hours and 20.2% across the previous seven days.
Why is Ethereum Classic spiking?
Ethereum Classic has attained an all-time high hash rate of 48 terahashes per second (TH/s), with a year-to-date growth rate of more than 480%. The hash rate reflects the computer power required to generate new blocks on the network.
The surge in Ethereum Classic’s hash rate was most likely caused by increased miner activity on ETC in preparation for this month’s Ethereum upgrade, also known as the Merge, which will transition the network’s consensus process from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) system.
The event, scheduled to take place in the middle of September (13th-15th), will dispense with the need for miners to verify transactions.
As a result of the Merge, Ethereum miners, who have collectively invested billions of dollars over the years on mining equipment, may need a PoW blockchain capable of serving as a successor for Ethereum. The upgrade is also partly responsible for driving interest in Ethereum Classic. In this case, with the Merge stopping mining on Ethereum, ETC has emerged as the desirable destination for miners.
Seeing Ethereum Classic for some as a credible PoW alternative blockchain to Ethereum, several mining pools have considered expanding their operations to Ethereum Classic.
It is important to note that the hash rate of Ethereum Classic is still relatively low compared to Ethereum. Ethereum Classic’s hash rate accounts for just 5% of Ethereum’s total hash rate, around 895 TH/s. This indicates that Ethereum Classic has a significant distance to go before it can be regarded as a major network by PoW miners.
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