Ethereum (CRYPTO:ETH) didn't generate the knock-your-socks-off returns that some cryptocurrencies did this year. Other digital coins, especially Shiba Inu, absolutely exploded.
But make no mistake about it: Ethereum was still a big winner. If you bought $1,000 of the cryptocurrency in early 2021, here's how much you'd have now.
Image source: Getty Images.Crunching the numbers
Ethereum opened on Jan. 1, 2021 at a price of $737.31. An initial investment of $1,000 would have allowed you to purchase 1.356 ETH tokens.
The cryptocurrency took off right out of the gate in 2021. By the end of January, it was already up 88%. By mid-April, Ethereum had more than doubled.
Unsurprisingly, though, there was plenty of volatility. Ethereum lost nearly half its value within a few weeks in May. After rebounding, it fell roughly 20% again in September. Over the past several weeks, the cryptocurrency has pulled back by 16%.
Ethereum Price data by YCharts.
However, investors who held onto their Ethereum stake during this volatility were richly rewarded. Those 1.356 tokens that $1,000 could have bought at the beginning of the year would now be worth more than $5,423. In less than 12 months, Ethereum has delivered a return of over 450%. That's close to the 459% gain the cryptocurrency achieved in 2020.Some cracks in the armor
Ethereum's strong performance is especially impressive considering the challenges that it's faced. In August, it split into two chains in response to a bug that exposed the Ethereum network to attacks.
The blockchain is also slow compared to up-and-coming rivals. Ethereum currently can process between 15 and 45 transactions per second. Most concerning, though, are the high gas fees. Su Zhu, a prominent cryptocurrency investor, slammed Ethereum in November due to its high costs. He even stated that he had "abandoned" the cryptocurrency despite supporti...