Today's Recommendation | A Brief History of Ethereum Prices: Revelation of ups and downs

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of Mars Finance

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of Mars Finance.

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Source: Blue Fox Notes

(Grass at the foot of the mountain, Van Gogh)

Ethereum is different from pure digital currencies in that it introduces smart contracts for blockchain. It has opened up a new type of blockchain project. So, as the second largest project in the crypto world by market value, how has its price changed? Why do price changes arise? Although the specific reasons for each price change are different, its history can still provide us with some insights.

The appearance of a sudden rise and fall

Ethereum released its first version, also known as Frontier, on July 30, 2015. A week later, Ethereum was listed on the exchange. According to Coinmarketcap records, on August 8, 2015, the price on the Kraken Ethereum exchange was $2.77, and the trading volume on that day reached $205324.

As of 2015, this beginning can be said to be very eye-catching. Compared to its crowdfunding prices from July to September 2014, it was a good start. At that time, the crowdfunding price of 1ETH was around $0.3 to $0.45, which means its increase after going public exceeded six times.

But the good times did not last long. After 4 days, the price dropped significantly, and by August 11th, it had dropped to around $0.67. The reason for the decline may be due to early investor selling, which is very similar to the trajectory of many tokens when they first appeared on the exchange.

However, on August 14th, the price rebounded to $1.98, more than three times the level three days ago, and the trading volume also reached over $4.7 million. But this is just a temporary rebound. Subsequently, Ethereum prices continued to decline until October 22, 2015, when Ethereum prices fell to a historic low of $0.42. However, from the perspective of early crowdfunding participants, Ethereum has not fallen below crowdfunding prices in its history. The period of decline lasted for approximately 2 and a half months.

The era of $1 with a stable foothold

After falling to a historical low on October 22, 2015, after more than a week of adjustments, Ethereum gradually returned to the era of fluctuations around the 1 dollar until January 2016.

During this period, Ethereum held the Devcon-1 Developer Conference from November 9th to 13th, 2015, which attracted more attention from Ethereum. This activity is conducive to increasing people's expectations of the future value of Ethereum, thereby stabilizing its price at around $1 and not continuing to decline.

After experiencing early sharp rises and falls, and after two and a half months of adjustment, the market gradually reached a certain consensus on the final price of ETH, which basically fluctuated around $1. Coincidentally, this period also lasted for about 2 and a half months.

Leaping towards the $10 era

This is the first real leap in the history of Ethereum prices. From early January to mid March 2016, Ethereum prices jumped from around $1 to over $10. This process also took about 2 months.

The main event during this period was the expected release of a more stable version of Ethereum (Homestead), with the highest price reaching $15 on March 14th. The total market value of Ethereum exceeds 1.1 billion US dollars, entering the unicorn level.

However, with the release of the Homestead hard fork on March 14th, the positive news was digested and Ethereum prices began to decline, reaching a trough of $7.39 on April 30th. However, the following period fluctuated around $10. This period is abbreviated as the "$10 era" in the history of Ethereum prices. The $10 era was the longest period in the history of Ethereum prices, lasting approximately 11 months from March 2016 to mid February 2017.

From the above events, it can be seen that the release of the Homestead version is a key event in Ethereum's transition from the $1 era to the $10 era.

In addition, there was a significant rise and fall during 2016. This is all related to the TheDAO event. The DAO has launched crowdfunding for Ethereum. Given that the TheDAO project raised 12 million ETHs, which were worth $150 million at the time. This has driven optimistic expectations about the future of Ethereum, with prices reaching a historic high of $18.43 on June 16, 2016.

But the good times did not last long, and then a hacker attack occurred. TheDAO was hacked into stealing ETH worth $50 million. The high enthusiasm of people was instantly extinguished, and the price of Ethereum remained in a downward trend for more than half a year, but it could still maintain around $10. The lowest price appeared on December 28, 2016, dropping to $7.09.

There are two major events in the $10 era of ETH, the release of Homestead and the TheDAO project. Homestead has elevated Ethereum from $1 to $10, bringing the total market value of Ethereum to over $1 billion. The DAO project originally raised people's expectations for the future of Ethereum, but the hacking incident greatly hindered Ethereum's upward momentum.

The hacking incident surrounding the TheDAO project has split the Ethereum community into two factions. One faction advocates for a hard fork to roll back funds, while the other opposes this action because it violates the spirit of immutability of blockchain. Finally, Ethereum implemented a hard fork, resulting in two chains: ETH and ETC. Such community disputes have also led to a decline in Ethereum prices. Even so, Ethereum remains in an era of fluctuating around $10, and has basically stabilized its footing during this stage.

During this period, Ethereum also experienced DDos attacks and other negative news, which led to its low price in December 2016, but it still did not fall below $7.

Since the release of the Homestead version in 2016, despite numerous negative events, Ethereum has not returned to the era of $1, indicating that people have basically reached a relatively stable consensus on the market price of Ethereum.

Breaking through the $100 era

From mid February to mid June 2017, in just four months, Ethereum rose from around $10 to $400.42 on June 14, with a maximum increase of 40 times. This is also the highest period in Ethereum's price history. Directly raising the price of Ethereum from the era of $10 to the era of hundreds of dollars.

So, what happened at this stage?

There are several things worth paying attention to:

• On February 23, 2017, Ethereum was added to eToro (a social platform for traders)

• Bitcoin experienced a large number of congested transactions at the end of February 2017, which led traders to have better value expectations for the faster blockchain platform in the new area, and Ethereum successfully gained the attention of investors. Subsequently, Ethereum successfully broke through $20 in March, accelerating this upward trend.

• In early May 2017, Bitcoin experienced another transaction congestion, once again reminding people of the potential value expectations of Ethereum.

• At the same time, ETH has gradually become the preferred token for crowdfunding in encryption projects. With the implementation of crowdfunding for hundreds of blockchain projects in 2017, the demand for ETH has significantly increased.

The above events (including other factors not mentioned) have led to a gradual consensus on the value of hundreds of dollars in Ethereum prices.

During this period, Ethereum also experienced multiple declines. For example, since mid June 2017, there has been some decline, falling to around $154 in mid July. But then it stabilized and fluctuated between $200 and $400, with adjustments during this period mainly correcting for previous excessively high and rapid gains. However, even with the arrival of regulation in September 2017, its price only dropped to around $250. Subsequently, Ethereum prices fluctuated around $300 until mid November 2017. This period lasted for approximately 2 months.

$1000 Era: A Short and Beautiful Time

From mid November 2017 to mid January 2018, in approximately two months, Ethereum rose from around $300 to a maximum of over $1400. On January 14, 2018, Ethereum reached its highest ever price of $1427.48, with daily trading volume exceeding $5.6 billion.

These two months have been the most frenzied period for the entire crypto community. Not only Ethereum and Bitcoin, but the prices of other cryptocurrencies have also reached historical highs.

In the crazy bull market that pushed Ethereum from over $300 to over $1400, there are several key points:

• In mid October 2017, the Ethereum Byzantine network was activated, providing the technological fundamentals for a new round of upward development.

• The number of projects using ETH as a crowdfunding token continues to increase, with thousands of crowdfunding projects appearing. Some crowdfunding projects have skyrocketed after being listed on exchanges, leading to crowdfunding projects being highly sought after in the market, and this is also related to the inability of ordinary users to directly participate. The atmosphere of the market presents a state of fanaticism and irrationality.

• Bitcoin continues to rise, directly driving the popularity of the entire encryption market, with countless inexperienced new users flocking in, leading to an irrational surge in the entire encryption market, including Ethereum, greatly exceeding the fundamental value.

Returning from the $1000 era to the $100 era

Starting from mid January 2018, Ethereum has been on a downward path. Although there was a rebound during this period, Ethereum once stood between $600 and $800 for one or two months, but ultimately failed to hold on, thus starting a downward trend. Finally, on December 15, 2018, it fell to $84.55. This price is equivalent to the level of mid May 2017. However, Ethereum prices subsequently stabilized between $100- $300 and did not continue to decline.

After more than a year of illusions and illusions, Ethereum has finally returned to the $100 era. There are several key points during this period:

• The irrational prosperity of the market led to early entrants starting to cash in and leave, triggering a chain reaction in the market, and Ethereum was also unable to escape.

• The overall price decline in the crypto market has also made it difficult for new crypto projects to perform well on the exchange, leading to a decline in crowdfunding projects and a direct decrease in demand for ETH.

• To make matters worse, projects that raised a large amount of ETH tokens during the 2017 crowdfunding period sold ETH crazily, further exacerbating the downward trend of ETH.

• Ethereum's 2018 Constantinople hard fork upgrade was delayed and Bitcoin continued to decline, leading to pessimistic market sentiment, with Ethereum falling below $100 ($84.55).

• The development of DeFi in 2018 and 2019, the upgrading of Constantinople in February 2019 and Istanbul in December 2019, as well as expectations for ETH2.0, have stabilized the situation for ETH prices.

In mid December 2018, after Ethereum fell below $100, the price of Ethereum remained stable between $100 and $300 in 2019 until today.

epilogue

It has been over 4 years since Ethereum was listed on the exchange in August 2015, and in just a few short years, Ethereum prices have experienced a roller coaster development.

After a year of adjustment and digestion in 2019, the price of Ethereum has remained stable between $100- $300. This is also a result of over a year of repeated correction and polishing in the market.

With the improvement of Ethereum's fundamentals and changes in market sentiment, Ethereum's 2020 will ultimately not be a smooth year.

Firstly, DeFi is gradually finding a fit between its products and the market. Currently, the DeFi project has locked in 3.1 million ETHs, and the demand for ETHs in the DeFi project will continue to increase. Secondly, the development of the Rollup solution for Ethereum layer2 has brought expectations to people, while privacy solutions on Ethereum (such as Aztec) have also brought more possibilities. Finally, the PoS demand expectation for ETH in ETH2.0 will also lead the market to reflect it in prices.

The development of these fundamental aspects of Ethereum, coupled with the halving of Bitcoin in 2020, has led many people to be optimistic about Ethereum in 2020.

From the above developments, optimism towards Ethereum is understandable. However, this is conventional logic, and if there are some Black Swan events, they may also lead to significant iterations, such as security issues with DeFi project assets, potential uncertainty issues after Bitcoin halving, other unpredictable security issues, regulatory issues, etc.

Overall, Ethereum in 2020 may not be as volatile as in 2017, but there is also a high probability that it will change much more than in 2019.

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Risk warning: All articles in Blue Fox NotesIt cannot be used as investment advice or recommendation. Investment carries risks, and investment should consider personal risk tolerance,It is recommended to conduct in-depth investigation of the project and make careful investment decisions.