Here’s what happened with the Ethereum price in 2021

Cryptos offering smart contract technology are drawing increasing attention.

| More on:
The word Ethereum written on a blue and black circle.

Image source: Getty Images

Ethereum (CRYPTO: ETH) investors who bought on 1 January 2021 and sold on 31 December will have little to complain about.

Ethereum started the year just gone trading for US$730. It hit an all-time high of US$4,892 on 16 November before retracing. By the end of the year, Ether was worth US$3,683, a year-on-year gain of 406%, according to data from CoinMarketCap.

Now with the token’s significant daily price swings in mind, that yearly gain could be a bit more or less, depending on the time of day you bought and sold.

Regardless of timing though, the gain dwarfs the 63% 2021 gain posted by Bitcoin (CRYPTO: BTC). And with the recent run of price gains, Ethereum now represents more than 20% of the total crypto sphere by market valuation.

What differentiates Ether from Bitcoin?

All cryptos are not made the same.

Indeed, as we reported here, the top 3 performing cryptos in 2021 are all involved in blockchain related virtual gaming.

Like Ethereum, the number 4 and 5 crypto performers in 2021 are primarily involved in smart contracts.

Among Ethereum’s appeal is its real-world applications. It makes use of its own crypto, Ether, to serve as a platform for other cryptocurrencies. With decentralised finance (DeFi) growing rapidly, Ether’s ability to execute decentralised contracts has drawn significant investor attention.

Bitcoin, on the other hand, primarily serves as an alternative to fiat currency. That’s the money printed by sovereign states. You can use Bitcoin to buy and sell an increasing range of items. You can hold onto it. Or you can send internationally without having to go through any traditional intermediary banks.

Are competing cryptos a threat to Ethereum?

Ethereum’s blockchain enabled smart contracts could indeed be under threat from upcoming altcoins. Though they’re unlikely to unseat the number 2 crypto anytime soon.

In December, Ray Brown, market analyst at crypto exchange CoinSpot, told The Motley Fool that, “Ethereum’s scalability is one of the biggest hurdles that is currently limiting the success of its network and the countless dApps [decentralised applications] that run on the network.”

While the network is being upgraded in what’s knowns as Ethereum 2.0, the so-called Ethereum killers are circling.

“The competition to take the DeFi crown is heating up by what some are labelling as the Ethereum killers,” Brown said.

“Some of the contenders… are considered to be Cardano (CRYPTO: ADA), Solana (CRYPTO: SOL) and Polkadot (CRYPTO: DOT),” he explained. “Each of these cryptoassets tinker in the smart contracts space, each offering innovative advantages that Ethereum is currently lacking. They are all also building momentum quite quickly.”

While the competition may be looking to take some of the action, Ethereum’s 406% gains in 2021 appear to indicate that investors still have faith in the world’s number 2 crypto.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Ethereum and Bitcoin.  The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cryptocurrencies


Crypto venture firm’s lessons after $10 million haircut on LUNA losses

What can investors learn from the collapse of LUNA? Here's one research team's take...

Read more »

Clock with post it as a reminder of Tax Time

Own crypto or NFTs? Here’s why the ATO could have you in their sights come tax time

More than a million Aussies are estimated to have transacted in digital currencies and NFTs this year.

Read more »

woman examining ethereum price

Why is the Ethereum price down 48% this year?

Higher interest rates increase the appeal of safer investment assets like bonds and cash deposits.

Read more »

a man sitting at a computer at a desk has a look of anguish and trepidation on his face as he opens his eyes wide and made an aargh type expression with his mouth as his hair stands on end and his tie also stands on end with one part over each shoulder in what is supposed to be a humorous picture of something in a panic.

Un-stable coin? Terra crypto woes continue with another 31% fall

I'd think very carefully before going bargain hunting among stumbling altcoins.

Read more »

Concept image of Bitcoin and hand using laptop.

Using Bitcoin to diversify your portfolio? Read this

Cryptos have been rising and falling largely in line with other risk assets.

Read more »

Smiling ASX investor holding a gold bitcoin.

Good riddance to meme speculators ditching Bitcoin: expert

The exit of 'get rich quick' investors from crypto is a boon for serious long-term holders, says DeVere Group boss…

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.

Can regulators prevent another US$45 billion crypto stablecoin meltdown?

Terra's LUNA token, meant to help its UST token remain pegged to the US dollar, has lost 99.99% of its…

Read more »

A man looks down with fright as he falls towards the ground.

Is the Bitcoin price heading all the way back down to US$20,000?

Last week's meltdown of UST and its backing crypto LUNA sent most every crypto tumbling lower.

Read more »