Ethereum Classic (ETC) has experienced a dramatic rally over the past two weeks, surging more than 124% against the U.S. dollar as the crypto market bets on a wave of miner migration from Ethereum following The Merge. The network's hashrate has also spiked sharply, approaching its all-time high set in May 2021.
Price and Hashrate Surge on Miner Migration Hopes
The price of ETC jumped from around $20 to over $45 in the 14-day period ending July 27, 2022, outperforming Ethereum's 45.7% gain during the same timeframe. The catalyst appears to be the impending Ethereum Merge, which will transition the second-largest blockchain from proof-of-work (PoW) to proof-of-stake (PoS). Miners currently securing Ethereum with Ethash-compatible GPUs are expected to seek alternative PoW chains, and Ethereum Classic—which shares the same Ethash algorithm—is the natural beneficiary.
Network hashrate data confirms the migration narrative. On July 13, before the Merge date was tentatively set, ETC's hashrate stood at 17.39 terahash per second (TH/s). By July 28, it had climbed 20% to 20.88 TH/s, with a weekly peak of 21.41 TH/s. This is within striking distance of the all-time high of 28.53 TH/s recorded on May 7, 2021. If the current pace continues, ETC could soon break its hashrate record.
Korean Won Captures Over 20% of ETC Trade Volume
In terms of trading activity, the Korean won (KRW) has emerged as a major force in the ETC market. While Tether (USDT) remains the largest trading pair with 59.17% of all ETC trades, KRW accounts for 20.82%, significantly outpacing the U.S. dollar's 7.84% share. Data from South Korean exchanges shows that ETC trading represents 11.53% of total volume on Bithumb, and on Upbit, the ETC/KRW pair alone contributes 22.96% of the exchange's overall volume. The surge in Korean retail interest aligns with global speculation about post-Merge miner migration.
Transaction fees also favor ETC: the average ETH fee today is 0.002 ETH ($3.31), while ETC's average fee is just 0.000096 ETC ($0.0031), making it attractive for low-value transfers and small-scale miners.
DeFi Ecosystem Lags Behind Ethereum
Despite the price and hashrate excitement, Ethereum Classic's decentralized finance (DeFi) ecosystem remains minuscule. According to DefiLlama, Ethereum holds $56.62 billion in total value locked (TVL) across 523 protocols, representing over 65% of the $87.56 billion locked in all blockchains. In contrast, ETC's TVL is only $175,483, with 92% concentrated in a single automated market maker, Hebeswap. The network supports only three DeFi applications, compared to Ethereum's 523.
However, the influx of miners could bring renewed attention and development resources to ETC's smart contract layer. Additionally, ETC has a fixed supply cap of 210,700,000 tokens, with 136,026,596 already in circulation. This leaves only 74,673,404 ETC to be mined, adding a deflationary narrative that appeals to long-term investors.
While Ethereum Classic has become a short-term winner in the Merge-driven narrative, its long-term value will depend on whether the migration of miners translates into broader ecosystem growth. For now, the combination of surging hashrate, strong Korean retail demand, and supply scarcity suggests that ETC may continue to attract attention as the Merge deadline approaches.