- 2021 has seen Ethereum hit all-time highs and carry the NFT boom
- EIP-1559 also saw the first steps towards EIP-1559
- However, the metaverse could be developed without it
Ethereum has had one of its most momentous years since its creation in 2015 – it laid down the foundations for Ethereum 2.0, it hit a record high price, and it provided the basis for the NFT boom. Not everything has gone swimmingly however, with the metaverse potentially ignoring it in favor of other blockchains. In this end of year review we look at how Ethereum has fared in 2021 in three important categories – price, adoption, and development.
Like many coins, Ethereum broke all time highs. It began the year at $720, a figure that by the end of the year would seem inconceivably low – it raced to $4,400 in May, surpassing this in November when it touched $4,870. Ethereum’s incredible price rise hasn’t just been impressive in dollar terms – it has also been grinding away at its Bitcoin comparative price, starting the year being worth ₿0.03 and ending it closing in on ₿0.09, despite the price crypto market crash in the middle of the year.
This price action against Bitcoin is more important because it shows that Ethereum is digging out more of a market share compared to its illustrious brethren, prompting many to proclaim that the ‘flippening’ could happen in 2021. With Ethereum close to being a deflationary asset, this isn’t as crazy as it sounded when it was last proclaimed in 2017.
Despite its price increase against Bitcoin, it’s fair to say that adoption has been something of a mixed bag this year. On the plus side, the DeFi space continues to grow and Ethereum continues to be the blockchain that underpins most of it, while the NFT explosion undoubtedly helped Ethereum to record breaking gains this year. However, it’s pretty clear that the next generation of crypto, the metaverse and Web 3.0, will not be built on Ethereum, which is troubling for the project.
Ethereum 2.0, with its deflationary mechanism and transactional overhaul, needs to come quickly in 2022 and be successful almost instantly, otherwise projects currently using Ethereum are likely to seek moves to other platforms due to the transaction fees being imposed on users.
2021 has been a good year for Ethereum development, with August seeing the implementation of EIP-1559, the first major step towards Ethereum 2.0. Ethereum founder Vitalik Buterin has said he is considering implementing an emergency measure to bring down the cost of transacting in Ethereum, which would be a welcome development, but aside from this the Ethereum team is fully focused on delivering Ethereum 2.0 in 2022.
Bitcoin’s 2021 – Quality Not Quantity
EIP-1559 was a huge deal for Ethereum this year as it showed it can deliver on its long awaited upgrade. The fact that the metaverse is ignoring Ethereum is a troubling development, but it is still the bedrock for DeFi and NFTs, for now…
2022 could be a sink or swim year for Ethereum, but as 2021’s price action has proved, it still has the potential to do something special if the bull run continues.