In the world of cryptocurrencies, 2021 was a year of unprecedented growth and excitement, with Ethereum at the forefront of innovation. The funding rates for Ethereum throughout the year tell a story of soaring optimism, market corrections, and the gradual maturation of the second-largest cryptocurrency. These rates, reflecting the premium traders are willing to pay for leverage, provide a unique window into market sentiment and expectations.
The first quarter of 2021 kicked off with extraordinary bullish sentiment for Ethereum. January saw an average rate of 0.09979%, with individual daily rates reaching astounding levels. On January 4th, the rate peaked at a staggering 0.27267%, indicating an unprecedented level of optimism as Ethereum's price surged past $1,000.
February maintained this extreme bullish trend with an even higher average rate of 0.12228%. The month witnessed sustained periods of high rates, with February 9th hitting 0.24687%, coinciding with Ethereum breaking above $1,800 for the first time.
March showed a cooling of sentiment but still maintained high positive rates with an average of 0.04253%. The month ended strongly with rates reaching 0.06632% on March 31st as Ethereum approached $2,000, setting the stage for further gains.
The second quarter began with continued optimism. April's average rate was 0.05727%, with several days seeing rates above 0.10%. This bullish sentiment aligned with Ethereum's push to new all-time highs, culminating in a peak price above $4,000 in May.
May started strong but experienced a dramatic shift. The average rate for the month was 0.02515%, masking the extreme volatility. On May 19th, as the broader crypto market experienced a significant correction, the funding rate plummeted to -0.05678%, the lowest point of the year so far.
June marked a significant cooldown with the average rate dropping to 0.00552%. The month saw more stable rates, often hovering around 0.01%, reflecting the market's uncertainty as Ethereum struggled to maintain support above $2,000.
The third quarter began with subdued sentiment. July maintained a low but positive average rate of 0.00586%, as the market digested the recent correction and Ethereum consolidated around the $2,000 level.
August showed signs of renewed optimism with the average rate rising to 0.01534%. The month ended on a high note, with rates consistently above 0.01%, coinciding with Ethereum's push back above $3,000.
September saw a further increase in positive sentiment, with the average rate climbing to 0.02103%. The month experienced some volatility in rates, peaking at 0.11109% on September 5th as Ethereum briefly touched $4,000 again.
The final quarter of 2021 witnessed another surge in bullish sentiment. October started strongly with an average rate of 0.02713%. The month saw several spikes in funding rates, notably on October 21st at 0.08523%, coinciding with Ethereum's new all-time high above $4,600.
November maintained positive momentum but showed signs of cooling off, with an average rate of 0.01663%. While not as extreme as earlier in the year, the month still saw significant daily fluctuations, with rates often exceeding 0.03% as Ethereum held strong above $4,000 for much of the month.
December showed a moderation in funding rates, with the average dropping to 0.00945%. This cooling aligned with Ethereum's price consolidation below its recent highs. The month ended on a relatively calm note, with rates consistently around 0.01% in the final week.
The year 2021 demonstrated the extreme nature of Ethereum funding rates during a bull market cycle. From the euphoric highs in Q1 to the dramatic correction in Q2, and the gradual recovery in the latter half of the year, funding rates provided a clear reflection of the market's roller-coaster journey. These fluctuations coincided with Ethereum's rise from around $730 at the start of the year to nearly $4,700 at its peak, before settling around $3,700 by year-end, solidifying its position as a leading force in the cryptocurrency ecosystem.
