Ethereum Classic (CRYPTO: ETC) has rallied 140% over the last month, but Messari analyst Tom Dunleavy isn’t convinced about its long-term value as an investment.
What Happened: “ETC price rose quickly, but looking at fundamental metrics, nothing has changed about this chain,” said Dunleavy in an analyst note earlier this week.
“Volumes and users have been largely unchanged for years. Applications are non-existent.”
See Also: Bitcoin Resilient Despite Solana, Nomad Hacks: Top Crypto Attracting 'Smart Money' Again, Says Analyst
The recent price rally in ETC has largely been driven by the upcoming Merge which will mark the Ethereum (CRYPTO: ETH) network’s transition to Proof-of-Stake (PoS). Since PoS will make mining ETH redundant, miners have been forced to migrate to other chains, and ETC appears to be the optimal choice.
Unlike ETH mining which generates $24 million for miners daily, Dunleavy estimates that ETC mining would net miners only $700,000 per day.
ETH mining currently accounts for 97% of all GPU mining revenue, while ETC mining is just 2%, implying a considerable difference in profitability.
In light of this, the analyst finds that even if a meaningful portion of miners migrate to ETC, mining difficulty would only increase and make many miners unprofitable.
ETC's price has historically spiked when it appears in headlines, said Dunleavy, who doesn’t believe its current price surge accurately reflects the network’s growth.
“At the end of the day, prices should have some fundamental linkage to network usage and underlying economic activity. Unfortunately for ETC holders, there isn’t much of either,” he said.
See Also: Ethereum Classic Ecosystem Gets $10M From Antpool As Merge Date Nears
Price Action: At press time, ETH was trading at $1,650, up 2% over the last 24 hours, as per data from Benzinga Pro. ETC was trading at $36.48, down 0.7% over the same period.
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