Ethereum Price History: 2015 to 2022

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Ethereum has had a rough start to the year, but it’s still way above what it was a year ago.

This kind of volatility is just part of the deal when it comes to investing in Ethereum, or any other cryptocurrency. Ethereum is the second-largest cryptocurrency after Bitcoin, making up roughly one quarter of the entire 16,000-plus cryptocurrencies in existence. But its susceptibility to big price swings is why experts say investors should proceed cautiously.

Invented by then-21-year-old computer programmer Vitalik Buterin in 2015, Ethereum isn’t just a digital currency like many other cryptos. While Bitcoin is known as “digital gold,” Ethereum also works as a software platform that runs on blockchain. When people refer to “Ethereum,” they are often talking about the blockchain itself, whereas the native currency used to transact on Ethereum is Ether, and typically shortened to “eth” or its ticker symbol, ETH.

The price of Ethereum rose to an all-time high above $4,800 late last year, though it has hovered around 3,000 so far in 2022, with recent drops going below that. With the recent crash of crypto and stock prices, Ether has been trading at around$2,000 for the last few weeks.

Before you buy Ethereum or any other cryptocurrency, make sure you are prepared for the extra risks it can pose to your portfolio. Experts say it’s smart to keep crypto investments to under 5% of your total portfolio, and not to let it hold you back from maintaining a healthy emergency fund and paying down high-interest debt.

Here’s a look at Ethereum’s price over the years, and how today’s slumping price compares.

Ethereum Price History

Prices calmed for about two years, and ETH fluctuated between $150 and$730. While this range still demonstrates the dramatically volatile nature of crypto, these rolling peaks and valleys stayed within about a $600 margin and were comparatively mild when we look at what came next in 2021. 2021: The Year of NFTs (and Therefore ETH) The NFT market exploded in 2021 and grew into a multibillion-dollar sector. Top NFT collections like CryptoPunks and Bored Ape Yacht Club traded for tens of millions of dollars or more. Because of its smart contract capabilities, Ethereum was (and arguably still is) the most popular blockchain protocol for minting, buying, and trading NFTs — though competitors are moving in now that Ethereum’s service fees are high and traffic is crowding up the website. The demand for NFTs sent the number of people buying ETH skyrocketing. To purchase an NFT, consumers need a crypto wallet funded with ETH, which they then use to purchase the digital tokens they want. It’s no surprise, then, that the price of ETH shot up from around$730 in late 2020 to $4,000 by May of 2021, followed by another all-time high around$4,800 in November.

But since the dawn of 2022, Ethereum’s price dropped back below \$3,000. Bearish sentiments of the crypto market have begun to circulate, and some speculate they could take hold of the narrative at least momentarily.

What Investors Should Know About Ethereum’s Price

As with any volatile investment, financial planners say you should ignore the ups and downs and focus on your bigger-picture strategy — whether that includes crypto or not.

While the demand for crypto is rising — the number of new wallets worldwide increased by 45% last year, according to a recent CoinDesk report — a comparatively small percentage of the larger population engages with Bitcoin, Ethereum, and other altcoins. The popular crypto exchange Coinbase now has over 73 million worldwide users, and Gemini found 21.2 million Americans now own cryptocurrency of some kind.

A good rule of thumb, according to most financial planners, is to invest a small percentage of your portfolio in crypto, the same way you would another alternative investment that exists outside the traditional stock market. Generally, this means between 1% and 5% of your total portfolio should be in crypto at maximum. Any more opens you up to greater risk — and you’d have to weather some serious swings.

When staying within the 1% to 5% window, “the gains exponentially outweigh the risks,” says Alicia R. Hudnett Reiss, certified financial planner and founder of Business of Your Life, a Washington, D.C-based financial planning service.

If the price of ETH drops 10% overnight, for example, a 1% allocation of your portfolio won’t deplete your overall savings and investments, at least not beyond repair. You might not even notice much of a dent, argues Hudnett Reiss.

“But on the other side, you could have such a high return,” says Hudnett Reiss. When the price of ETH swings back toward the positive and/or increases exponentially as it has done in the past, you’ll notice a favorable return that will pad your portfolio nicely.

If you decide to invest in crypto, Bitcoin and Ethereum are common places for beginners to start: “Those are the two most widely adopted,” says Mint certified financial planner, Brittney Castro. “They are kind of like the Apple and Google of cryptocurrency,” she says, meaning they were the first to hit the market and capture the imagination of investors.

However, Castro adds a note of caution: “We still have no idea what the future holds and what that means for the value of these specific cryptocurrencies.”

While the future is uncertain with Etherum and any type of crypto, you can start to prepare your finances today so that you’re ready to invest at your desired risk level. Prioritize your retirement fund, savings accounts, and high-interest debt payoff first — knowing that even industry insiders view crypto investing with a long-term perspective in mind.

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