Following Bitcoin, Ethereum remains one of investors’ preferred cryptos, with its market cap accounting for nearly 20% of the $1.1 trillion global crypto market. For those looking to create a diversified portfolio, this cryptocurrency is one of the safest bets in the long run. Although the crypto market experienced turbulence last year, Ethereum can still provide value for those willing to weather the industry’s volatility.
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The history of Ethereum: how it all began
The cryptocurrency industry is still relatively new, and it started with the launch of Bitcoin in 2009. The digital asset was created as an experiment to offer the opportunity to trade online, but it turned out to be truly successful, raising the interest of many. After the creation of Bitcoin, other altcoins were introduced, including Ethereum. Besides offering a token for trading, Ethereum also works as a blockchain with functionality for developers, enabling the creation of smart contracts without relying on a mediator.
Unlike Bitcoin, whose creator remains mysterious even today, Ethereum has a more straightforward history. In November 2013, Vitalik Buterin published a white paper explaining in detail how Ethereum works. But other experts helped bring the project to life, who are all known as the co-founders of the cryptocurrency.
Ethereum drew interest from investors in early 2014 when the concept was made public at a Bitcoin conference, succeeding in raising capital through ICO the same year and selling more than $18 million worth of ETH. Although ETH coins were available for purchase in 2014, the blockchain went live on July 30, 2015.
Ethereum’s evolution
Although the Ethereum blockchain came to fruition in July 2015, its development happened in the following years. Its initial iteration, known as Frontier, hosted smart contracts and enabled ETH mining. Later on, the blockchain saw different updates, including Byzantium, Constantinople and the Beacon Chain. Each update was meant to improve the blockchain; for instance, Beacon Chain enabled the shift from the PoW consensus mechanism to PoS.
Between 2020-2021, DeFi projects built on the Ethereum blockchain raised interest, highlighting issues regarding Ethereum’s scalability. Ethereum’s transition to a different consensus layer was implemented to solve this problem, although it involves various stages until the final result is achieved.
Ethereum price history
Since its launch in 2015, Ethereum’s price has remained under $1 for almost the entire year. In 2016, however, it succeeded in crossing the $10 mark, reaching $10.03 on March 4. By 2017, Ether started to gain significant popularity, with its value crossing the $1000 mark in the following year.
However, the following year, Ether was inevitably affected by the crypto crash, dramatically reducing its value to only $100. Between 2019-2021, its price rallied again, reaching an all-time high of $4,815. These fluctuations in the price of Ethereum are normal in the crypto space, and after a period of dips and downturns, the market is looking bullish. Although it may take some time, prices will likely recover eventually, creating new investment opportunities.
Investors’ attitude toward Ethereum is optimistic
Different factors come into play when it comes to the price of a digital asset, such as media exposure, and it’s essential to consider them before deciding which crypto to add to your portfolio. Undoubtedly, Ethereum has gained excellent media exposure due to its most recent upgrades. Although the Merge’s impact wasn’t seen in its value, it surely made a difference in the global perception of the network, as the upgrade lowered energy consumption by a significant percentage (more than 99.99%).
The Shanghai Upgrade was another major event for the cryptocurrency, allowing individuals to withdraw staked ETH. These major improvements can add to the token’s value by improving the network’s efficiency and scalability. For these reasons, investors are positive regarding the future price of Ethereum, believing that it will skyrocket after all the significant upgrades.
Should you buy Ethereum right now?
Whether you should or shouldn’t buy Ethereum right now is a personal choice, depending on your goals. The cryptocurrency is indeed promising, and despite how bad it was last year for crypto, 2023 had a more positive start. Thanks to the PoS consensus mechanism, a fractional share of Ethereum is being burned, making it a deflationary cryptocurrency. This news is great for those seeking scarce digital currencies. Deflationary currency experiences a decrease in supply over time. Inflationary currency, on the other hand, sees an increase. This is why investors find deflationary currencies appealing: if the supply decreases, but the demand is constant, the value of a cryptocurrency naturally increases.
Unlike Bitcoin, which is only a value storage system similar to digital gold, Ethereum can be regarded as the digital oil that allows a larger system to function. Besides being a store of value, it is also a tool that powers different operations on the Ethereum network, such as DApps and smart contracts. Essentially, it is a multi-tool whose applications go beyond transactions.
The ongoing development of the blockchain network contributes to Ethereum’s long-term value. And the future updates intended to boost its speed and reduce transaction fees only strengthen Ethereum’s position as a leader in decentralized finance.
While there may be a long way to go until Ethereum reaches its all-time high again, this isn’t an indicator of what could happen in the future with the cryptocurrency. Ethereum, like other digital assets, went through difficult situations, and there’s no guarantee this won’t happen again in the future. It is uncertain whether Ethereum will experience a return similar to the one in November 2021, but for those believing in its potential, it may be worth buying the asset now, as it could bring substantial yield. Investors should, however, remember that cryptocurrencies are volatile, which means there’s also a possibility of losing money. Hence, it is important to approach the market cautiously and make smart investment decisions by embracing a long-term mindset.
Last words
Despite the challenges faced by the crypto industry last year, Ethereum is still one of the best options for those seeking a safe bet. Those who practice patience may succeed in weathering the volatility of the market and reap significant benefits if the price of the cryptocurrency increases exponentially. However, there are no guarantees of financial returns when investing in digital assets, so you should be prepared for any kind of outcome.
Until now, Ethereum has had a great evolution, but it remains to be seen where the cryptocurrency will be headed in the future.
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