• The crypto market experienced the DeFi summer of 2020, resulting in a surge of liquidity across decentralized finance (DeFi) protocols and a nearly doubling of the price of Ether to $490.
• The COVID-19-induced quantitative easing across global markets caused a mega-bull run that lasted almost a year and saw the price of Ether increase nearly ten times to a peak above $4,800.
• The upcoming Shanghai upgrade scheduled for March 2023 could open up withdrawals for stakers, potentially creating a bullish opportunity in Ether similar to the Ethereum Merge narrative of 2021.
The last year has been a roller coaster ride for cryptocurrency traders, with the market experiencing a range of highs and lows. The DeFi summer of 2020 saw decentralized finance applications like Compound and Uniswap turn Ether (ETH) and Bitcoin (BTC) into yield-bearing assets via yield farming and liquidity mining rewards, driving the price of Ether to $490.
This surge in liquidity across decentralized finance (DeFi) protocols was then followed by a mega-bull run that lasted almost a year. Driven by quantitative easing across global markets, the price of Ether increased nearly ten times to a peak above $4,800 as investors sought to take advantage of the bullish market conditions.
Unfortunately, the euphoric bullish phase eventually drew to a close and a painful cool-down journey followed. This was exacerbated by the UST-LUNA crash which began in early 2022, driving the price of Ether back down to $800.
However, a ray of hope eventually arrived in the third quarter as the market experienced a positive rally led by the Ethereum Merge narrative. This shift to an environmentally-friendly proof-of-stake (PoS) consensus mechanism was a big step forward, reducing Ether inflation post-merge. The event saw the price of ETH peak at over $2,000 in the lead-up to the Merge on Sept. 15, 2021.
Now, traders are contemplating what will happen to ETH price and staked Ether derivatives after the next network upgrade. This upgrade, known as the Shanghai upgrade, is scheduled for March 2023 and could open up withdrawals for stakers. If successful, this could create a bullish opportunity in Ether similar to the Ethereum Merge of 2021.
The success or failure of the Shanghai upgrade will depend on the Ethereum community and their ability to come together and agree on the best way forward. If this happens, traders and investors could be in for another bullish run on Ether. Only time will tell, but one thing is certain: the crypto market is always changing, and there are sure to be more exciting opportunities ahead.