ETH Enters Price Discovery as All Time High Finally Breaks
In January 2018 the euphoria faded. Ethereum’s dramatic 12-month rise from $8.14 to $1,419 was cut short as a global crypto bubble unwound in cataclysmic fashion.
Bitcoin and Ethereum spent the following months and years in an excruciating downtrend, occasionally offering hope of recovery before falling to even lower lows.
Headlines around the world repeated those same Bitcoin eulogies seen in the crash of 2014. From the outside, crypto was (this time) well and truly dead.
It’s been said before, but the best work is done during a bear market. Investors quickly grew weary of “poor performance” and, with their backs turned on Ethereum, countless developers began coding the new financial building blocks that would support the growth of a soon-to-be $20B industry, Decentralized Finance.
With price distractions out of the way, we saw the launch and growth of all manner of Ethereum applications:
Synthetix began minting synthetic assets. ETHLend (now Aave) built out decentralized loans. Uniswap onboarded billions of dollars in liquidity. NexusMutual provided smart contract cover for a rapidly increasing number of “degens”. TheGraph began indexing web3. The decentralized stablecoin, DAI, issued over a billion coins. Eth2 staking shipped. Layer 2 scaling from Matic, xDAI, Optimism, zkSync and others reached mainnet. Yield farming boomed, offering 100%+ APYs that have lasted the best part of a year. Decentralized exchange aggregator and automated market maker, 1inch, began trading tens of billions. Opyn launched decentralized options contracts. Dydx launched decentralized perpetual futures. And token airdrops from the likes of Uniswap, Axie Infinity and Badger gave an entirely new meaning to token distribution.
Ethereum fundamentals also strengthened throughout 2020. Block space demand was up, transaction fees collected on Ethereum began outpacing Bitcoin by 2:1. Developer numbers were growing, active users were growing. The price? Flat.
Bitcoin, off the back of some very public institutional buying from the likes of MicroStrategy and others, then breached its all time high in December of ~$20,000 before doubling to over $40,000 in January.
During Bitcoin’s run, ETH was dragged upwards but lagged heavily behind in respect to its own all time high. Finally, and for no other reason than a simple repricing of an undervalued asset, ETH made its way to a new high of $1,439.10 on January 19th 2021.
While this moment will be hugely exciting for anyone who stuck around for the last 3 years, it’s today’s emphatic validation of the trail that Ethereum blazes that should create the most optimism.
To all the developers, users and stakeholders – here’s to an enormously successful 2021 and the continued feeling of awe that this technology so often leaves us in.
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