Exploring Ethereum’s 5 Year Chart: Trends, Expected Growth and Potential Investments
Cryptocurrencies are increasingly becoming popular in the financial market as a viable investment option. Among them, Ethereum has gained global recognition for its ability to enable smart contracts and decentralized applications. As investors evaluate the market potential, it is crucial to examine how Ethereum has performed over the years and its projected growth. In this article, we will explore Ethereum’s five-year chart, trends, expected growth, and potential investments.
The Emergence of Ethereum
Launched in 2015, Ethereum is a decentralized open-source blockchain that allows developers to create and operate decentralized applications and smart contracts. The Ethereum network has its currency, Ether (ETH), which enables developers to execute transactions by paying for computational services.
Ethereum’s Five-Year Chart
Ethereum’s price history has been volatile, with a period of significant growth from 2017 to 2018, followed by a dip in 2019. However, the cryptocurrency has since recovered, and as of August 2021, Ethereum’s market capitalization stands at $387 billion. For a better understanding, let’s look at Ethereum’s five-year chart.
In January 2016, Ethereum’s price stood at $0.93. The price increased to $10.20 by the end of the year, resulting in a gain of over 1000%. Ethereum’s value skyrocketed in 2017, reaching an all-time high of $1,417 in January 2018. However, the price of Ethereum plummeted by over 80% in the next ten months, and by December 2018, Ethereum’s price was just $84.
The market trend changed in 2019, and Ethereum’s price saw a gradual increase throughout the year. In 2020, as the world faced a pandemic, Ethereum’s price was relatively stable, ranging between $130 and $390. However, 2021 has been a promising year for Ethereum, with the price reaching an all-time high of $4,362 in May.
Catalysts Driving Ethereum’s Growth
Several factors lead to Ethereum’s growth, including the following:
1. Decentralized Finance (DeFi)
Decentralized Finance (DeFi) is an ecosystem of financial applications built on top of blockchain technology that operates without intermediaries such as banks. Ethereum is the primary blockchain used for DeFi projects, and its use has grown tremendously, with its total value locked (TVL) exceeding $150 billion in August 2021, indicating a demand for Ethereum.
2. Non-Fungible Token (NFT)
Non-Fungible Tokens (NFTs) are unique digital assets that allow artists and creators to tokenize their works on the blockchain. The Ethereum blockchain is the most popular platform where NFTs are created, bought, and sold. The market for NFTs has exploded, with several notable sales highlighting the potential for growth.
3. Upcoming Upgrades
Ethereum is undergoing upgrades from its current Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS), making it more energy-efficient. The transition to PoS is expected to reduce the supply of Ethereum and increase its demand, in turn driving growth.
Potential Investments in Ethereum
Investing in Ethereum is risky due to its volatile nature. However, considering its market potential, there are several ways investors can invest in Ethereum, including:
1. Direct Investment
Direct investment in Ethereum means purchasing Ether and holding it in a wallet. This approach allows investors to benefit from any price appreciation.
2. Indirect Investment
Indirect investment in Ethereum is done through exchange-traded funds (ETFs) or futures contracts. These provide exposure to Ethereum without holding the asset directly.
3. Mining
Mining Ethereum is another way to invest in Ethereum. Miners earn rewards in Ether for validating transactions on the network.
Conclusion
Ethereum’s growth potential is a testament to the blockchain’s ability to enable innovative applications such as DeFi and NFTs. Its recent upgrades and increased mainstream acceptance bode well for its future prospects. Investing in Ethereum requires thorough market research and risk assessment. However, for those looking to invest in cryptocurrencies, Ethereum presents a viable option.
