Ethereum Classic Almost Triples, MATIC and UNI Surge as July Brings Relief to Crypto Market

July has brought relief to the crypto market, with Ethereum classic (ETC), the supposedly dead coin and not-so-similar clone of Ethereum's ether (ETH) token, and other out-of-favor coins like UNI and MATIC leading the recovery in digital assets with at least $1 billion market value.

ETC has added 184% this month, while scaling solution Polygon's MATIC and decentralized exchange Uniswap's UNI have gained 102% and 86% respectively, CoinDesk data show. Industry leader bitcoin (BTC) had added 20% and ether 60% at press time. The total crypto market capitalization has rebounded to $1.14 trillion from last month's $762.82 billion low.

Analysts said coin-specific factors are at play alongside the broader market risk reset.

Ethererum's merge powers ETC rally
"ETC is being driven by speculation that ETH miners will go to ETC and potentially, there could be another hard fork benefitting them," Lucas Outumuro, head of research at IntoTheBlock, said. The driver for the move is Ethereum's impending "merge," combining the network's proof-of-work (PoW) blockchain with a proof-of-stake (PoS) blockchain called the Beacon Chain that has been running since 2020.

After the merge, likely to happen on Sept. 19, Ethereum will start operating as a PoS chain, requiring market participants known as validators to stake, or hold, a minimum number of coins to confirm transactions in return for rewards. In a PoW system miners solve a computational problem to verify transactions.

The merge means Ethereum miners will have to find a new home, most likely Ethereum Classic, which is supposedly the only chain compatible with the Ethereum mining machinery.

"Ethereum's mining network is made up of two types of hardware: ASICs and GPUs," Messari's Sami Kasab said in a research report. "The problem with ASICs is that they can't be repurposed for different applications besides mining ETH. Ethereum Classic is the only other PoW coin that can be mined with an ETH ASIC, since its hashing algorithm is compatible with ETH's algorithm."

Recently, AntPool, the Bitmain-affiliated mining pool, invested $10 million to support the Ethereum Classic ecosystem. Ethereum Classic is a hard-forked version of Ethereum, born from a hack of The DAO, a smart contract operating on the Ethereum blockchain, in 2016.