The Ethereum (CRYPTO: ETH) price went on quite a ride during the 2022 financial year ending 30 June.
It brings to mind Charles Dickins' first line (or the first part of that first line) in A Tale of Two Cities. Namely, "It was the best of times, it was the worst of times…"
By the time the smoke cleared, the Ethereum price was down 55% for the 12-month period, according to data from CoinMarketCap.
How did it get there?
First, the best of times.
Ethereum price hit all-time highs in FY22
Ethereum, the world's number two token by market cap, kicked off FY22 trading for US$2,274 after falling sharply from its May 2021 peaks.
From there the cryptocurrency went charging higher for the next three and a half months, though not in any kind of straight line, mind you. By 16 November the Ethereum price had reached a new record high of US$4,892, which remains the virtual high water mark today.
It was a similar story across most risk assets, including Bitcoin (CRYPTO: BTC), which hit its own record highs on 10 November.
Not coincidentally, mid-November also saw the tech-heavy NASDAQ reach all-time highs.
Which brings us around to the worst of times.
Risk assets hammered amid rising interest rate expectations
By mid-November the first signs of persistent and unexpectedly high inflation figures began to seep through. And investors began lightening their holdings of risk assets in anticipation of some sharp interest rate hikes to come.
This saw the NASDAQ tumble 31% from its November peak through to 30 June 2022.
The more volatile Ethereum price fell more than twice that hard, ending the financial year trading for US$1,018, down 79% from its 16 November levels.
The falls came despite progress being made transitioning the Ethereum blockchain from proof-of-work to proof-of-stake.
The switchover, years in the planning and now dubbed 'the merge' will increase the speed and lower transaction costs on the blockchain. Importantly, it will also greatly reduce the crypto's carbon footprint as the proof-of-stake protocol requires far fewer energy hungry computers.
Supporters hope the merge will eventually help the Ethereum price outperform once more.
