Ethereum in 2021: The Highs and the Lows

Almost one year ago today, we merrily ushered in a happy New Year.

Well, now that 2021 is almost over, we can safely declare that this year turned out to be just as weird as the last.

Like every other year, we’ve endured a few moments we’d much rather forget. Like watching a shirtless man in a Viking helmet rampaging through the U.S. Capitol with 9,000 red capped friends.

Ethereum in particular underwent massive and remarkable technical changes this year. As a result, the smart contract platform has enjoyed an immense upward momentum in price throughout the year.

So, as part of our festive series of articles, we’re looking at Ethereum’s most memorable moments from 2021.

January

On Jan. 1, ETH was priced at just $738 and had around 11% of the total crypto market share, compared to Bitcoin’s 69%. Also, Ethereum’s DeFi protocols had a little over $16 billion in locked value.

Early in January, the Governor of the Bank of England Andrew Bailey warned investors that crypto “probably” won’t last, citing Bitcoin as a particular concern. He said, “If I were a regulator, I would be hyperventilating over bitcoin.”

It’s unclear whether Bailey was the first financial leader to declare Bitcoin as a scam in 2021, but he certainly wouldn’t be the last.

And yet, judging by BTC’s and ETH’s record-breaking run in the weeks following his statement, Bailey’s warnings about a possible cryptopocalypse had no effect on investors whatsoever.

Over the next ten days, ETH climbed to $1345.98 — nearly breaking its ATH of $1,396.42 — before it dipped back down to $959.97 the following day.

And in the middle of January, many will remember billionaire Tesla CEO Elon Musk wading into crypto for the first time when he added #Bitcoin to his Twitter profile.

In seemingly no time at all, the entire crypto market soared in value, much to our delight. On the 19, ETH finally achieved a new ATH of $1,428.94.

February

The first five days of February suggested that ETH — which hovered at around $1,300 — might be in for a quiet month.

However, by the afternoon of the 5, ETH had soared all the way up to $1,749.72 — another new ATH — before pulling back slightly to $1,511.54 over the following few days.

And on Feb. 9 and 13, ETH ascended to consecutive all-time highs of $1,815.96 and $1,869.52 respectively.

At the time, many speculated that ETH’s bull run was probably started by the news of a Tesla’s financial disclosure, which revealed that the electric vehicle manufacturer had amassed $1.5 billion worth of BTC.

A short while later, BTC crossed the $1 trillion market cap for the first time, and ETH’s market cap sat just shy of $225 billion.

Tesla’s Bitcoin purchase wasn’t the only news to give ETH HODLers cause for celebration in February.

The global payment titans Mastercard and PayPal both indicated they planned to take advantage of the surge in interest in crypto, and the CME Group launched ETH futures as part of a wider expansion into crypto derivatives.

Accordingly, ETH began a monster bull run on the morning of Feb. 15, climbing from $1,695 to a high of $2,036.29 on the 20, marking the first time ETH had crossed $2,000.

However, by the end of February, ETH had slipped back to around $1,400.

March

March was an all-round excellent month for Ethereum.

The first version of the Berlin hard fork launched onto the Ropsten Testnet, which was designed to tinker with (and lower) ETH’s gas fees.

Also in March, Amazon Web Services (AWS) Managed Blockchain announced it would be supporting Ethereum by allowing its customers to provide Ethereum nodes and connect to the Ethereum network through its platform.

A spokesperson for AWS said, “with this launch, AWS customers can easily provision Ethereum nodes in minutes and connect to the public Ethereum main network and test networks such as Rinkeby and Ropsten”

The nod from Amazon generated a boost to Ethereum’s network traffic and suggested that big tech was taking the crypto space seriously.

From March 5-13, ETH went on another great run, climbing from $1469.73 all the way up to $1933.04.

At this point, the total value locked into DeFi protocols on Ethereum had risen from $16 billion in January to $42 billion — a 162.5% increase!

Shortly after Amazon’s announcement, the global payment provider VISA revealed that it had accepted its first digital currency payment through the Ethereum network. The transfer came from Crypto.com and was paid in the USDC stablecoin.

Visa explained that the move was part of a pilot scheme to help new crypto businesses, and that it was working on other crypto-related products.

Clearly, partnerships with corporate behemoths like Amazon and Visa were big news for Ethereum. But it was the sale of a single NFT which brought the most media attention to Ethereum in March, and perhaps for all of 2021.

Christie’s sale of Beeple’s “5000 days” NFT grabbed headlines across the world when it fetched an eye watering $69 million dollars — or 42,329 ETH — at auction.

The NFT collage consists of 5000 individual drawings — one per day since 2007 — depicting business magnates like Jeff Bezos and politicians like Donald Trump in various dystopian scenes.

Will Gompertz, who was formerly the BBC’s art editor, said Beeple’s magnum opus would be remembered as either “the moment before the short-lived cryptoart bubble burst, or as the first chapter in a new story of art.”

After the auction finished, the good people of Twitter were predictably outraged that anyone would pay such a ludicrous sum of money for a digital artwork.

And yet, despite all the positive press directed at Beeple and Ethereum, most people remain unaware of what NFTs are. Or how a community of “Bored Apes” are able to hang out in a decentralized, autonomous “Yacht Club.”

April

April of 2021 will be fondly remembered by Ethereum HODLers as a fantastic month.

Just three days into April, ETH had already reached a new ATH of $2,143.23, which would be the first of many.

On the 13, Mastercard, UBS and JP Morgan invested a whopping $65 million into ConsenSys, founded by Joseph Lubin (one of Ethereum’s founders) and described as “the leading Ethereum software company.”

ConsenSys specialises in developing software and applications for the Ethereum network and is perhaps best known for developing the MetaMask wallet.

Raj Dhamodharan, Mastercard’s head of blockchain, said that payment giant’s partnership with ConsenSys will help Mastercard to support central banks with research related to central bank digital currencies.

Naturally, the linkup between Mastercard and an Ethereum-related firm delighted the Ethereum community.

In more good news, on Apr. 15, at block 12,244,000, the Berlin hard fork went live on the Ethereum Mainnet.

Named for the inaugural Ethereum Devcon convention, the Berlin hard fork introduced some new transaction types and made some minor alterations to the gas fees.

While Berlin was seen as an important technical milestone for Ethereum, it was really the forerunner to the bigger, more noteworthy London hard fork which went live in August.

The following day, the Coinbase IPO kicked off. NASDAQ provided a reference price of $250 per share, and during the first day the crypto exchange was worth more than $100 billion for a while.

Following the Coinbase IPO news, ETH crossed $2,500 for the first time, eventually reaching new all-time highs of $2,534.41 and $,2613.91 on April 16 and 22.

May

Continuing its surge of upward momentum at the end of April, ETH rose to the $2,700 mark during the first few days in May.

Ethereum’s total share of the crypto markets had risen from 11% to 15% here, and Bitcoin was down to 48% from 69%.

At this point, there was more than $93 billion locked into Ethereum’s DeFi protocols — a 400% increase from the year’s start.

Uniswap — a decentralized exchange (DEX) on Ethereum — had more than $9 billion locked into its protocol. Similarly, Maker — a DeFi lending protocol also based on Ethereum — had locked more than $16.7 billion.

In the early hours of May 3rd, ETH crossed $3000 for the first time – a milestone few predicted would be reached until the end of 2021 at the earliest.

From here, the world’s second largest cryptocurrency went on an obscene bull-run, tearing through all its previous records and eventually reaching $4,330.75 during the morning of May 12.

This 60% surge in just nine days was pretty unbelievable.

If you somehow managed to avoid social media during these two weeks, know that the hype was unprecedented, even for crypto. Claims of “ETH to 30k,” and even “ETH to $100k” were thrown around with startling regularity.

Because shortly after ETH reached an ATH which defied even the most optimistic shillers, Musk tweeted that Tesla would suspend Bitcoin payments for its electric vehicles due to environmental concerns about Bitcoin mining.

ETH promptly suffered through a two-week downward spiral, reaching a low of $1,857.64 on the 23. On a more positive not, ETH had recovered somewhat by the month’s end, and we moved into June with a price of $,2625.

June

The political leader of El Salvador, President Nayib Bukele, made crypto history when he revealed his exciting plans to make Bitcoin legal tender throughout his country.

And on June 9, President Bukele confirmed on Twitter than the El Salvadorian Congress had passed the #BitcoinLaw with a large majority.

The internet promptly exploded, but many Western government were quick to denounce Bukele’s unprecedented move as unnecessarily risky.

Despite El Salvador giving us a major milestone to celebrate, June wasn’t a fun month for Ethereum HODLers. ETH dropped from a high of $2,878.71 on the 3 all the way down to $1,773.4 on the 22.

At this point in time, the total value locked into Ethereum’s DeFi protocols had dropped by 31% from the previous month to $64 billion.

Also in June, ex-President Trump took a short break from golfing to grace us with his presence. The Donald informed us that Bitcoin is in fact a scam, and that it would be much better if everybody just used the U.S. dollar. Thanks Donald 👍🏻

Fortunately, from the 22, ETH quickly climbed out of the red and into the black, and by the end of June the second biggest crypto was back up to $2,251.

Despite the price drop in June, ETH was still up more than 200% since the beginning of the year — a significantly better performance than Bitcoin, which at this point was up by just 17%.

July

July proved to be yet another mixed month for Ethereum and the wider crypto market.

Twitter founder Jack Dorsey provided some good news early on, announcing a new open-source Bitcoin Platform was in the works.

And German financial regulators revealed that they would permit financial institutions to hold up to 20% of their assets in crypto. However, in the U.S., the SEC decided to postpone its decision on whether to approve a Bitcoin ETF.

Bitcoin mining centres across China were forced to shut down, with many choosing to set up shop in the US instead. This caused Bitcoin to crash from about $40,000 to below $30,000, much to the delight of the “Bitcoin’s a bubble” brigade.

Ethereum was similarly affected by China’s crackdown. During the first week of July, it looked like Ethereum might just hold its price, but on the 7, the token started sinking, reaching a floor price of $1,738.76 on the 20.

However, in the final week of July, ETH managed to climb back to $2,536.46.

August

Much to the relief everyone who held ETH through the middle months of 2021, August was one of Ethereum’s stable months.

Despite getting off to a slow start, ETH rose from $2481.97 on Aug. 4 to $3,322.21 on the 14.

PayPal announced that its UK customers would be able to buy, hold, and sell crypto through its website, including Ethereum.

August was also a month of huge technical progress for Ethereum. On the 5 — at block 12,965,000 — the London hard fork went live on the Ethereum Mainnet.

London was one of a number of key upgrades to Ethereum which collectively form the upgrade to Ethereum 2.0, which is expected to be finali`ed in late 2022 or 2023.

The London hard fork included some major upgrades for the Ethereum network, including EIP-1559, which introduced a new gas fee structure.

The single gas fee was replaced with a base fee and an optional priority fee. The base fee is burned — turning Ethereum into a deflationary cryptocurrency — and the priority fee goes to miners as a tip. In the six weeks following the hard fork, $1 billion in ETH was burned.

Although this improvement brought some stability to ETH’s gas fees, Ethereum miners weren’t too chuffed about their reduced profits.

The next significant Ethereum upgrade is called “the merge,” and will link the Mainnet to the Beacon Chain for consensus. The merge is expected sometime in 2022 and will mean Ethereum finally adopting a proof of stake consensus mechanism.

During the latter half of August, ETH fluctuated between $2,900 and $3,400, and we moved into September with a price of $3,433.

September

The crypto markets were fairly consistent during the first week of September, and we saw ETH rise to around $3,900.

Bitcoin’s dominance over the market was recorded at just over 40%, and Ethereum was up to 20% — nearly double its market share compared to January.

At this point in time, Ethereum’s DeFi protocols had more than $90 billion in locked value — up nearly 500% from January 2021.

On the 7, El Salvador officially became the first country to use Bitcoin as legal tender, marking a huge milestone for the crypto space.

But while El Salvadorian government gave each of its citizens $30 in Bitcoin to encourage participation, a lot of El Salvadoreans weren’t happy about their President’s decision. Many people took to the streets to voice their concerns, and a Bitcoin ATM was set alight.

Still, most people agreed that September would be a good month for crypto. Unfortunately, the hype train could only keep chugging along for so long.

When news broke that the Chinese government were making all cryptocurrency transactions illegal — and that it intended to double down on its efforts to end Bitcoin mining — it became clear that the crypto markets were in for a tough few weeks.

Early on the 7, ETH’s price started dropping, and reached a low of $3,275 during the morning of the 8.

To make matters worse, Solana — one of Ethereum’s main competitors — had been on an almighty bull run since the end of August, soaring from $35 to $210 by Sept. 9.

Despite some brief respite between the 13 and the 17, it was mostly downhill from here for the second biggest crypto, and ETH finished September at $2,974.24.

October

Ethereum enjoyed a stellar October, largely off the back of consecutive positive news stories.

Early in October, rumors began circulating that Amazon could soon make a move into crypto after a job advert searching for a “Head of Digital Currency and Blockchain” was spotted and shared on Twitter.

Naturally, there was some disagreement about whether Amazon’s interest in crypto was a good thing. But the crypto markets generally responded positively to the news, as the possibility of Amazon accepting payments in crypto would be historic for the industry.

In more positive news, the U.S. Securities and Exchange Commission finally approved Bitcoin futures ETFs, opening up a brand-new avenue for investors to capitalize on Bitcoin.

And to further improve what was already a brilliant October for Ethereum, Mark Cuban called himself an “Ethereum maxi.”

The legendary investor and owner of the Dallas Mavericks cited Ethereum’s growing utility, smart contracts, and DeFi applications as the features which impressed him the most.

Cuban later told CNBC, “as an investment, I think Ethereum has the most upside,” which if October is anything to go by could be a great call.

ETH started October just shy of $3000 and steadily rose to yet another ATH of $4,445.23 by the end of the month.

November

Ethereum passed a number of important milestones in the first few weeks of November.

At this point, Ethereum’s DeFi protocols had $122 billion in locked value, marking a 660% increase from the start of 2021.

By Nov. 3, ETH had reached $4648.54, and by Nov. 10, ETH set a new ATH of $4,844.15 — an increase of 556% from the start of the year.

On Nov. 10, Bitcoin reached its current ATH of $68,789, and a week later ETH reached its ATH of $4,891.70. Sadly, November became a topsy turvy month for Ethereum from here on.

On Nov. 15, President Biden signed a $1.2 trillion infrastructure bill into law. The bill included legislation requiring crypto exchanges to notify the IRS of any crypto transactions for tax purposes.

Although the legislation is expected to bring in an estimated $28 billion in tax revenues, it will require significantly more reporting from crypto traders and exchanges. Predictably, crypto traders and exchanges weren’t too pleased about all this.

In more bad news for crypto, the Guardian reported that the Indian government was contemplating a ban on all cryptocurrencies until it decided on whether to launch a central bank digital currency.

In light of these negative headlines, ETH’s price dropped sharply to below $4,000 from nearly all-time high levels.

A quick recovery saw ETH soar upwards to $4,528.44 on Nov. 25, and then right back down below $4000 the following day.

During ETHs recovery, global crypto markets nearly crossed $3 trillion for the first time.

On Nov. 24, news broke of a new Covid-19 variant called Omicron, and markets sunk worldwide. The Dow Jones sunk by 2.5% during the day the news broke.

But by the end of November, ETH had moved steadily upward and was holding steady at the $4,650 mark.

December

December hasn’t been Ethereum’s best month by any stretch. Looking back at some of the price predictions made in March and April, many thought ETH could have reached $10K by now, but it wasn’t meant to be.

Despite starting the month strong at $4,764.85, ETH sank all the way down to $3,632.56 by Dec. 4.

There’s number of possible culprits, but the worryingly fast spread of the new Omicron variant was the likely catalyst for this latest downward price move.

The second biggest crypto did partially recover by Dec. 10, but has since sunk back below $4,000 at multiple points throughout the December.

But now that we’re nearly through December and into 2022, it’s safe to say that 2021 will go down in the crypto history books as a spectacular year for Ethereum.

The network has doubled its dominance of the global crypto markets since January, and the ETH token is set to finish the year up by an enormous 450% — more than double the growth of the global crypto markets.

It’s been a great year for DApps too. Ethereum’s DeFi protocols finish the year with just shy of $120 billion in locked value, and the global DeFi space now boasts nearly $200 billion locked — a 760% increase from January.

Will 2022 be the year that crypto goes mainstream? Might we see Ethereum overtake Bitcoin? Or will we see another crypto winter?