2020 marked a pivotal year for Ethereum, as the cryptocurrency market navigated through global uncertainties and witnessed the nascent stages of the DeFi boom. Ethereum's funding rates throughout the year reflected this journey, showcasing periods of extreme volatility, cautious optimism, and burgeoning excitement for the network's potential.
The first quarter of 2020 began with growing optimism for Ethereum. January saw an average rate of 0.02258%, with rates climbing steadily throughout the month. On January 31st, the rate peaked at 0.10278%, signaling strong bullish sentiment as Ethereum's price approached $180.
February witnessed unprecedented levels of enthusiasm, with the average rate surging to 0.07057%. The month experienced several days of extreme positive funding, reaching an astonishing 0.26688% on February 12th, coinciding with Ethereum breaking above $250.
March brought a dramatic shift due to the global COVID-19 pandemic. The average rate plummeted to 0.01077%, masking the extreme volatility. On March 13th, known as "Black Thursday," the funding rate hit -0.09992%, the lowest of the year, as Ethereum's price crashed below $100.
The second quarter showed signs of recovery but remained subdued. April maintained a low average rate of 0.00891%, with most days hovering around 0.01%, reflecting cautious sentiment as Ethereum slowly reclaimed the $200 level.
May saw a slight increase in optimism with an average rate of 0.01402%. The month experienced more volatility in rates, with some days approaching 0.04%, mirroring Ethereum's push towards $250.
June continued the modest trend with an average rate of 0.01095%. The month saw stable rates, often at 0.01%, indicating a period of consolidation as Ethereum fluctuated around $230.
The third quarter marked a significant shift in sentiment. July's average rate jumped to 0.02810%, with a notable surge in the latter half of the month. On July 28th, the rate reached 0.11621% as Ethereum broke above $300, driven by growing excitement around DeFi protocols.
August saw further increases, with the average rate climbing to 0.04328%. The month experienced significant volatility in funding rates, peaking at 0.13597% on August 14th, coinciding with Ethereum's push towards $440 and the explosive growth of DeFi projects.
September showed a cooling off, with the average rate decreasing to 0.01004%. The month started strong but saw more subdued rates in the latter half, reflecting a period of consolidation as Ethereum held above $350.
The final quarter of 2020 witnessed growing momentum. October had a modest average rate of 0.01662%, but saw increasing volatility towards the end of the month. The rate reached 0.07387% on October 22nd as Ethereum broke above $400.
November marked a significant shift in sentiment, with the average rate surging to 0.05038%. The month saw several days of extreme positive funding, peaking at 0.14155% on November 23rd, as Ethereum approached $600 and the launch of Ethereum 2.0's beacon chain neared.
December maintained the bullish momentum with an average rate of 0.03674%. While not as extreme as November, the month still saw significant positive funding, particularly in the latter half. The year ended on a high note with a rate of 0.05882% on December 31st, as Ethereum surpassed $730.
The year 2020 demonstrated the resilience and evolving nature of the Ethereum market. From the pandemic-induced crash in March to the DeFi summer and the excitement surrounding Ethereum 2.0, funding rates provided a clear reflection of the market's journey. These fluctuations coincided with Ethereum's price recovery from lows around $90 in March to nearly $740 by the end of December, setting the stage for the explosive growth seen in early 2021.
