While Bitcoin is renowned for having a wild ride this year, Ethereum has been subjected to equally exciting price swings. In this article, we're going to explore how the Ethereum price UK has ridden the volatility waves of 2021 and come out singing. Before we dive into the details, we'll first touch on the basics of the network's contribution to the blockchain industry.
Ethereum is the second biggest cryptocurrency by market cap and was the first to provide the industry with a blockchain platform on which developers can build their own applications (known as decentralized apps, dapps for short). Through Ethereum, users are also able to create smart contracts, which are digital agreements built using blockchain technology that automatically execute once predetermined criteria have been met. These allow for fully automated, decentralised dealings that bypass any issues associated with human error and further drive the benefits of blockchain technology.
Ethereum has been the foundation of enormous innovation in the industry, with over 2,800 dapps, spanning 18 sectors (including games, finance, etc.), built on top of the network. This includes two of the top 10 cryptocurrencies that both used the ERC-20 token standard that Ethereum provides to built stablecoin networks. These stablecoins function as their own entities, however, they use Ethereum's decentralised network to execute transactions within their own enterprise. Whole industries have been built using Ethereum's blockchain foundation, including decentralised finance (more commonly referred to as DeFi).
The cryptocurrency opened in 2021 trading just below £545 (UK price), a reasonably high amount compared to the average trading price of £337 experienced in 2020. Five months later the price increased by 6x. Let's explore how it got there, and where it is today.
While Bitcoin also experienced a high increase in value, these two cryptocurrencies grew for two very different reasons. The first few weeks of the year saw gradual growth for Ether, almost tripling in value to a high of £1,400 in mid-February, before taking a dip falling to the £1,000 mark in early March.
This did not last long as the price saw an increase again due to the NFT craze which thrust Ethereum into the mainstream media spotlight. In March, news (both within and outside of the blockchain industry) went crazy over the sale of the world's most expensive NFT. A piece of digital art by an artist called Beeple was sold at Christie's for 38,000 ETH (just over £49.9 million at the time). This news led many outside of the crypto world to learn about Ethereum, as the market witnessed a gradual increase in retail investment over the coming months.
By the first of May, the ETH UK price reached the £2,000 mark for the first time in history, and this fast-paced incline was only just beginning. Three big aspects were about to push the Ethereum price UK to new highs. The first was the network's announcement that an update called Berlin launched, a leap forward in the project's move from a proof of work to a proof of stake consensus. This update was substantial in paving the way to reduce transaction fees, and subsequently drew a lot of attention (and support) within the industry.
Another contributing factor was the announcement that the European Investment Bank was planning to incorporate the Ethereum network in its first-ever digital bond sale, a move that would tie in industry heavyweights like Goldman Sachs, Banco Santander, and Societe Generale. This garnered a lot of attention for Ethereum outside of the crypto industry for a change, within the traditional financial sector.
The final catalyst for Ethereum's all-time high was the launch of Uniswap's V3. As one of the largest DeFi projects, Uniswap is a smart contract protocol set to optimize ETH trading. Both occurring in May 2021, this pushed the value of Ethereum to groundbreaking heights, reaching £3,167.19 on the 12th. Unfortunately, after this the market experienced a mass sell-off, causing the value to less than halve. However, by the end of May, the price had corrected from lows of £1,300 with no issues and was trading around £1,600.
Since the May peak, the cryptocurrency has been engaged in a sideways trading pattern, hitting several small increases and dips along the way. At the time of writing in July 2021, the price was sitting around the £1,400 mark.
If you're looking to enter the market, this price point provides a possible opportunity before the next update launch, expected to take effect in early August. The platform is due to release its London hard fork, as announced by Ethereum developer Tim Beiko.
Another great entry point for traders in the UK into the Ethereum market is Tap Global. A seamless app that allows users to trade, spend, send and receive the second biggest cryptocurrency (among others). Through the platform's secure app, users are able to manage and store their crypto portfolios, as well as several fiat currencies. Learn more about Tap Global today, and change the way you trade.
The views expressed in this article are not financial advice and like any financial venture, you should do your own research before making any decision that could affect your capital.
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