The Ethereum network recently went through a hard fork to bail out DAO investors. The hard fork happened because the majority of the Ethereum community made a poor investment choice and voted to rewrite the blockchain.

Initially the hard fork seemed to go smoothly and everyone broke out the champaign in celebration. A small minority within the Ethereum community opposed the hard fork because it violated the original social contract of immutable applications.

Those who opposed the hard fork decided to keep the old chain alive and brand it as Ethereum Classic. Investors on the majority chain laughed at Ethereum Classic and lead developer Vitalik Buterin even mocked it by strangely referring to it as “moose”.

Ethereum Classic Rises

What started as a celebration and mockery quickly turned into concern as people woke up on Sunday morning to see Ethereum Classic (ETC) listed on Poloniex. Initially ETC was traded on a decentralized exchange called Bitquare but the order book was illiquid.

Poloniex is the biggest exchange for ETH trading volume and listing ETC suddenly turned it into a thing. The trading volume on ETC started off as 50% of what ETH was trading. The high trading volume of ETC was the first sign that the battle of the blockchain was gaining momentum.

Every ETH holder was given an equal amount of ETC and many Ethereum investors shrugged the volume off as they dumped their coins. The initial though was that ETH holders would dump this coin into the dirt. Buy support at the time was about 2000 BTC, which was a third of what ETH had.

ETH holders dumped millions of ETC on the market but price support held up. While most were emotionally revenge dumping, the smart money moved in to accumulate the cheap supply of ETC. Barry Silbert, one of the biggest investors in the Bitcoin space announced that he scooped up some cheap ETC at $0.50.

Barry’s order was timed close to the exact bottom and may have even triggered a price reversal. Moments after his tweet he started offering ETC over-the-counter through his company Genesis Trading. The set minimum OTC volume is 25,000 ETC in bulk purchases.

The Bitcoin Community Steps In

The Bitcoin community was disturbed by the dangerous legal precedence that Ethereum was setting through the hard fork. By making their ledger mutable it may have opened up Pandora’s box for regulators to interfere with decentralized blockchains.

Members of the Bitcoin community saw this as an existential threat to decentralization, so lent their support to help boost the old Ethereum chain. It’s entirely possible that much of the ETC buy support came from those in the Bitcoin community.

The ETC Markets

Today ETC trading volume overtook the volume of ETH as the price rallied +350%. Ethereum Classic’s market cap rose to around $200M with trading volume over $100M.

The price is currently consolidating inside of a large bull pennant, which could signal the continuation of the bull trend. While ETC was on the rise the price of ETH fell by 13% today.

It’s still entirely possible that large ETC whales or the DAO attacker may dump millions of coins on the markets. That said, this can help even the distribution and increase volatility, which may lead to a nice bounce play.

ETC Mining Power Increases

With the price rise and lower network difficulty, it’s become more profitable to mine ETC. The ETC hashing power rose to 665/GH, which is 20% of the amount on the ETH chain.

In the event that ETC ever gets more hashing power then it will become the dominant chain and revert back to being the original Ethereum.

Stay tuned as the epic saga of the blockchain battle continues…