Although Bitcoin set the foundation for cryptocurrencies as an asset class, Ethereum opened the door to crypto-based computational networks. Ethereum’s token, ETH, was released in a token sale in 2014, allowing early investors to buy ETH with BTC.
Validators earn ETH for securing the blockchain, and users pay ETH as network fees. Further, ETH is now used to power countless decentralized finance (DeFi) protocols, blockchain games, non-fungible tokens (NFTs), and more.
ETH Price Charts
Generally, the cryptocurrency market moves up and down as a unit, though the degree of movement can vary among different coins and tokens. Because of its long-held position as the second most valuable crypto in terms of market cap, ETH’s price fluctuations more closely follow BTC than the altcoin market, meaning it has shown slightly less volatility than the rest of non-Bitcoin cryptocurrencies. As such, ETH has historically trended with (or slightly lagged) BTC in its bull and bear markets, and many consider it a market setter than a purely speculative asset.
Still, its unique use case has set it apart from BTC and offered it slightly different strengths and weaknesses. Traders have used technical analysis to predict ETH’s price movements, as they have with BTC and other assets, like stocks.
ETH Price and its History
ETH gained traction slowly in its early years but exploded during its true major bull run in 2017-2018, rising from $10 to nearly $1500. Despite a subsequent dip, ETH solidified its position as as a leader among cryptocurrencies behind Bitcoin.
Just like other assets, ETH’s price fluctuates according to supply and demand. In ETH’s case, these dynamics have changed significantly over time, creating a large-scale experiment demonstrating how a cryptocurrency’s “tokenomics” can influence the price of an asset. For instance, unlike Bitcoin, ETH has never had a fixed maximum supply. However, there are rules that govern ETH issuance. When Ethereum was a Proof of Work (PoW) blockchain, it promised gradual production of new ETH, and the supply grew accordingly.
The 2021 London upgrade introduced EIP-1559, with a mechanism to burn (destroy) part of the supply. This predictably slowed the growth of ETH’s circulating supply, which further plateaued—and even began to decline—with The Merge in 2022, as Ethereum transitioned to a Proof of Stake (PoS) chain. The decreasing supply paired with increasing demand generally results in rising prices.
During 2021’s bull run, ETH reached almost $5000 per coin. However, macroeconomic slumping and the fall of FTX in November 2022 dragged down the coin’s price.
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Conclusion
- ETH is a digital asset that powers the Ethereum network. It was first brought to market in 2014 and saw its first massive appreciation in price in 2017-2018.
- The supply-and-demand dynamics that govern ETH’s price changed significantly over the course of 2021-2022, as upgrades to the Ethereum protocol resulted in the circulating supply of ETH to plateau and even decrease.