The ETH price rollercoaster: Navigating the ups and downs
Until October 2021, few people in or out of the crypto world knew what an NFT, a non-fungible token, was. That all changed when Mike Winkelmann, the digital artist popularly known as Beeple, sold an NFT of his “Everydays – The First 5000 Days” for an eye-popping $69 million at Christie’s. This sale generated a lot of buzz in the crypto space and turned the spotlight on Ethereum, the underlying protocol that made this groundbreaking innovation possible.
As the second-largest cryptocurrency by market capitalization, Ethereum is the backbone of a booming digital economy that enables creators to earn money online through decentralized apps, dApps, and decentralized finance, DeFi. So far, over 4,000 projects and 53.3 million smart contracts have been built, $3.5 billion earned, and 96+ million accounts opened on Ethereum, revolutionizing ownership and creativity in the digital realm. Transactions on the platform are powered by ether, ETH, Ethereum’s native coin.
With so much riding on Ethereum, the ETH price has been on a fascinating journey characterized by dizzying highs and devastating lows. When the cryptocurrency launched in 2014, the Ethereum price was $0.31, with the earliest investors getting 2,000 ETH for 1 BTC. ETH maintained the below $1 price for most of 2015 until it crossed the $10 mark in March 2016. By the end of 2017, ETH reached $774.69 and established itself as a serious player in the crypto space. Propelled by the 2017 Bull Run, ETH continued to rise, reaching an unprecedented high of over $1,000 in early 2018.
However, the 2018 crypto crash later reversed the steady gains, taking ETH back to the under $100 mark by the end of the year. That again changed during the 2019–2021 season when market conditions and investor sentiment caused most cryptocurrencies to rally again. With widespread COVID-19 lockdowns and a bleak outlook on the economy, investors turned to Bitcoin and alternative coins like Ethereum as a hedge against a looming economic crash. This further strengthened ETH, catapulting it to an all-time high of $4,815 on November 9, 2021. Like most coins, ETH started falling in the first half of 2022 as the pandemic persisted and several exchanges, like FTX, folded.
Technological developments have also significantly influenced the ETH price roller coaster. These began with the Berlin update that paved the way for the Ethereum Merge in 2022. This development, famously known as the Merge, migrated Ethereum from its previous proof of work model to a newer, more sustainable proof of stake protocol that addresses most scalability and congestion issues. Unlike other cryptocurrencies, Ethereum is less of a currency and more of an innovative hub that powers the development of decentralized apps. Consequently, every innovation on the platform leads to renewed interest in ETH.
With the recent upgrades caused by the Merge, ETH is expected to increase its market cap by the height of the next bull run. At the time of writing, the ETH price is $1,867.87, with a total circulating supply of 120.30 million and a diluted market cap of $224.57B. As a virtual asset and a software network simultaneously, Ethereum 2.0 undoubtedly holds a lot of potential, and there are speculations it might even flip Bitcoin in the next few years. However, no one really knows what the future holds in the crypto space, so it’s better to tread cautiously.