thecoinrepublic.com
Purchase will be made with cash in the open market
Ethereum Classic ETC price surge not sustainable
DCG announcement did not have impact on Ethereum Classic in the market
Ethereum Classic values fell by 10% on Monday
DCG parent company of CoinDesk and crypto-asset manager Grayscale Investments announced on Monday that it plans to buy up to $50 million in shares of Ethereum Classic Trust. DCG will fund the purchase with cash in hand and the purchase will be made in the open market.
ETC price gain of not 668% year-to-date sustainable
Ethereum Classic, ETC prices reached an all-time high in May to touch $177.26 and were almost thrice the earlier values. However, the surge was not sustained and Ethereum Classic fell by almost 70% to reach $50 and it has remained there to date. Classic Ethereum raked in an incredible 668% year-to-date – higher than ETH’s 163% gain. However, analysts are not impressed and view it much akin to Dogecoin (DOGE) frenzy and not investment based on the real Ethereum Blockchain technological potential.
The DCG announcement, however, did not have much impact on Ethereum Classic in the market. On Monday, when most cryptocurrencies say a fall, ETC also saw a fall by 10%.
Volatility in crypto assets opens new opportunities for DCG
The volatility in crypto assets had thrown up opportunities for DCG to capitalize. The difference in the price of its exchange-traded listings and the price of the underlying assets is being used by DCG to its full advantage. DCG owns the underlying assets and they can sell these to acquire shares in the exchange-traded listings and capture the spread
Earlier also the company has done something similar to shore up shares of Grayscale’s flagship Bitcoin Investment Trust in March. The entities give investors exposure to cryptocurrencies without the bother of setting up a wallet or safeguarding cryptographic private keys.
Developers strive to improve interoperability between ETC and ETH
The birth of Classic Ethereum is equally controversial and it was the result of a divergence in opinion among original Ethereum developers over how to handle a hack that resulted in a hard fork in 2016. Grayscale launched the Ethereum Classic product in 2017. The birth of Ethereum Classic happened when a group of Ethereum miners refused to participate in a 2016 fork led by Ethereum founder Vitalik Buterin
Since 2017, Ethereum Classic’s developers, funded by Grayscale donated over $1 million to the ETC Cooperative from the trust’s management fees. Developers use the fund to add Ethereum based updates to ETC. They also strive to improve interoperability between ETC and its more mainstream brethren, ETH.
Grayscale and its flagship Grayscale Bitcoin Trust owns a massive amount of Bitcoin and has packaged it into shares that trade on the public market. The Bitcoin Trust and other similar products enable investors which also includes some large funds that are ineligible to buy crypto directly, to get to various cryptocurrencies.