If you are interested in investing in the second-largest cryptocurrency in the world, Ethereum, first, it’s important to know how it has performed since the beginning of the COVID-19 scare.
There are several ways to get a good understanding of how Ethereum’s open-source blockchain has fared during what some call the greatest financial threat in a half-century.
When the COVID-19 virus made its way out of Wuhan, China, in early 2020, no one had any idea how serious the worldwide economic damage would be.
Entire nations faced monetary problems that nearly tanked their entire economies. National currencies had problems staying afloat.
Many corporations went out of business, and millions of people lost their jobs between February and the latter part of the year. The cryptocurrency market, however, did well.
There are several reasons for the solid long-term performance of the top virtual coins, notably the one that uses smart contracts as its basis of transacting and holds on to the second-highest capitalisation of all players in the niche, a virtual currency known by its three-letter abbreviation, ETH.
Three Questions About Ethereum
What has happened to the Ethereum price since COVID-19 came to be in 2020? Plus, what specific forces have been at work bring the price of the coin up and down during that same time?
Obviously, there are other things influencing the price of all virtual currencies in addition to the pandemic. Even the world’s worst health crisis in perhaps a century is not the sole propellant of market prices.
Finally, how has Bitcoin’s rival performed in relation to other coins in the sector? If we look at those three questions, it might be easier to understand some of the predictions that are floating around out there about where prices are headed in 2021 and beyond.
The Price of ETH Since March 2020
There’s plenty of disagreement about exactly when COVID-19 began infecting the rest of the world. From a financial standpoint, it’s safe to use March of 2020 as a starting point. That’s when global markets began reeling.
The price movement of ETH from the beginning of that year until now is probably the best way to understand how strong, in both the short-term and long-term, this decentralised blockchain-based cryptocurrency is.
The price of ETH was $214 in early March and began to fall, as did nearly every other virtual coin, through late July. But around the middle of the summer season, it began to rise from the ashes of the virus slump and nearly reached the $500 point by the first day of September.
The forces at work to lift ETH were already at work by June, when it nearly recovered all of its lost capitalisation from earlier in the year.
From June to September, total capitalisation shot up from $25 billion to $53 billion. By the end of December, that strength had held, and prices were hovering around $740.
Then the surge of 2021 began, with the price rising from a year-opener of $729 to $1,000 in six short weeks. What’s more interesting than watching the coin’s value rise so sharply after an early stumble during those first COVID-19 months? It’s looking at the events that influenced those gains.
Forces at Work Influencing Ethereum Price
It’s safe to say that all the major forms of cryptocurrency did well after the first half of last year, with the top four or five members of the community posting the most impressive gains.
The downward pull from March to July was primarily a result of world markets settling down from the initial monetary shock of unemployment and work stoppages.
Later, when investors began realising that the traditional securities markets weren’t the safest place to park money, a lot of cash began drifting toward the virtual coins.
Everyone benefited from the safe-haven effect, including precious metals. Once the millions of workers and citizens of the world acquired a sense that the worst was over, sometime in December, prices started ramping up, and have continued to do so since the start of the year.
Ethereum Price Predictions for 2021
What are some of the predictions put forth by major players in the global markets for Ethereum? Mudrex, Digital Capital Management, and Invest Diva all have their reasons for speculating on where things go from here.
There’s no consensus, but analysts from those three institutions set some lows and highs for ETH, with $1,300 being the area where there’s the strongest support and $2,200 being where the most powerful resistance resides.
In mid-February 2021, the coin hit $1,805 during the first active market sessions post-President’s Day. It’s instructive that even the most conservative among the prognosticators will admit that $2,000 is not an unrealistic pricing zone for the second-most popular crypto-coin. You’d have been hard-pressed to find anyone to agree with those guesses just six months ago.
If you’re interested in cryptocurrencies niche, please consider reading our guides on What Are Cryptocurrencies and How to Trade Cryptocurrencies!
