What's Going On With Ethereum Classic?

Ethereum Classic ETC/USD is trading up by 2.23% to $24.12 during Tuesday’s session after the SEC approved the first Ethereum spot ETFs, which began trading Tuesday.

The introduction of Ethereum spot ETFs is a significant event for the cryptocurrency market, primarily benefiting ETH.

Institutional investors, who are more likely to invest through ETFs, will focus on ETH rather than ETC. This shift in attention and investment could cause a relative decrease in demand for ETC.

See Also: What’s Going On With Wells Fargo Shares? Analyst Lowers Price Target

Initial reactions might have included speculative buying of ETC due to its association with Ethereum.

However, as the market rationalizes, investors may realize that the direct beneficiary of the ETF approval is ETH, not ETC. This realization can lead to a sell-off in ETC as the enthusiasm wanes.

As retail investors look for cheaper alternatives to ETH, they might initially drive up ETC’s price. However, with the spotlight on ETH due to the ETF, the perceived value proposition of ETC might diminish, causing investors to reallocate funds back to ETH, leading to a drop in ETC's price.

The cryptocurrency market is also highly correlated. If Ethereum (ETH) is experiencing a downturn despite the positive ETF news, broader market sentiment could turn negative, affecting ETC as well. Traders might sell ETC in response to overall bearish trends in major cryptocurrencies like ETH and Bitcoin.

Now Read:

• Small-Cap Gains Resume Ahead Of Major Tech Earnings; UPS Faces Worst Day Ever, Bitcoin Dips Below $66,000: What’s Driving Markets Tuesday?