Coinbase Cites Regulation for Its Surprise Ethereum Classic Listing; ETC Volumes More Than Double
After nearly six months of speculation, Coinbase finally added a new cryptocurrency to its “elite four” listing. And nobody saw it coming.
The choice to go with Ethereum Classic (ETC) on Monday triggered a bit of a PR firestorm for Coinbase. To clear up the confusion, vice president and general manager Dan Romero has provided some rationale for the decision.
Why ETC Was Chosen Ahead of Others
With respect to Ethereum Classic integration, Romero admitted to “seeing some head-scratching on this one.” However, he explained that the decision to include ETC was based on compliance with local regulations. Romero’s remarks, which come courtesy of CCN, did not elaborate further on the selection process.
If regulation is a concern, then it’s pretty clear why Coinbase chose Ethereum Classic instead of, say, Ripple XRP or EOS. The latter projects are overseen by private companies with a large stake in the outcome. For this reason, Ripple has been unable to diffuse speculation that its XRP currency should be classified as a security.
Hacked previously reported that XRP does not appear to be on Coinbase’s shortlist. In fact, Ripple has tried to buy its way onto Coinbase to no avail.
Ethereum Classic: A Brief Recap
Ethereum Classic emerged in 2016 as a hark fork of Ethereum. However, the cryptocurrency became somewhat of a sleeper during the yearlong bull market. Interest appears to have rekindled with an increasingly active developer community.
The ETC blockchain underwent a successful upgrade last month as developers sought to further differentiate the protocol from its more well-known cousin. The upgrade diffused what developers called a “difficulty bomb,” which would have rendered ETC mining unprofitable.
Ethereum Classic’s developer community is opting to stick with the proof-of-work model, which they say better promotes decentralization. Vitalik Buterin’s Ethereum project is planning a transition to proof-of-stake consensus.
In terms of value, Ethereum Classic has a total market capitalization of about $1.5 billion, according to latest data. That gives it the no. 18 spot on the crypto-market ranking, based on total capitalization.
The coin is currently valued at around $14.65, having declined 3.3%. By comparison, Ethereum was down almost 6% at $501.
ETC is traded on several top exchanges, including OKEx, Bitfinex and Binance. Its daily turnover has averaged less than $200 million per day over the past month before skyrocketing on Coinbase news. On Tuesday, more than $500 million in ETC traded hands.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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