It was actually Ethereum’s ability to help launch new crypto projects as ERC-20 tokens via what was called the initial coin offering, an early way for projects to raise capital via crowdfunding where the investors received a portion of the coins for their initial investment.
Much of the new tokens created could only be invested in through an exchange of Ethereum, which caused the asset’s price to skyrocket at the height of the crypto bubble by retail investors seeking to strike it rich by finding the next Bitcoin at its earliest investment stages.
However, the crypto hype bubble popped, and many of the projects built on Ethereum failed due to no fault of Ethereum’s. However, the negative sentiment surrounding other altcoins and these new ICO-born crypto tokens, caused Etheruem’s price to fall as well.
Ethereum started its life much under $1 and was only spare changed per ETH during the crowd sale. In just a year’s time, it reached an all-time high price of $1,448 driven largely due to the ICO boom, and was extremely profitable for early investors.
After regulators began to crack down on ICOs, calling them unregistered securities sales, Ethereum was used less and less for this purpose. However, this was due to the ICO boom ending and not due to Ethereum’s long-term price potential or projected growth.
Aside from ICOs keeping the price going down, ETH news has been otherwise extremely positive, and speculation suggests that Ethereum future is incredibly bright and will perform successfully as an investment asset, and has a solid long term value projection.
However, by far the biggest potential for Ethereum is the upcoming Ethereum 2.0 update and the massive growth of decentralized finance, also called DeFi.
To demonstrate the power of the DeFi movement and its impact on Ethereum, in just one year, the DeFi market accounted for just $317 worth of ETH locked up in decentralized financial products such as loans and more, this number increased to over $1 billion in 2020 and continues to climb.
This has dramatically increased the demand for Ethereum in recent months