Throughout 2017, Bitcoin and the broader crypto market experienced one of the most extraordinary bull runs in financial history. Bitcoin started the year at around $1,000 per coin. By December, it had reached nearly $20,000 — a 20-fold increase in twelve months. Crypto was on every television channel, in every newspaper, at every dinner party. Regular people were asking their financial advisors about Bitcoin. Some were emptying their savings accounts to buy at whatever price they could get.
The 2017 bull run was driven by several factors. The ICO boom brought in billions of dollars of new money and attention. Institutional interest was growing — the CME and CBOE launched Bitcoin futures in December 2017, giving traditional investors a way to bet on Bitcoin without holding it. Fear of missing out drove retail investors to buy at any price. Social media was full of stories of teenagers and college students becoming millionaires overnight.
The euphoria was extreme. Bitcoin Cash forked off Bitcoin in August, creating a new multi-billion-dollar coin. Ethereum went from $8 at the start of the year to over $1,400 by January 2018. Ripple’s XRP went from less than a cent to over $3. New ICOs were selling out in seconds. Friends of friends were quitting their jobs to trade crypto full-time. It felt like a gold rush, and everyone wanted a piece.
The peak came on December 17, 2017. Bitcoin briefly touched $19,783 on Coinbase and over $20,000 on some other exchanges. Traders watched their screens in amazement. Many were paper millionaires. A small number of early adopters had become paper billionaires. The total market cap of all cryptocurrencies exceeded $800 billion. It was a surreal moment.
And then it all came crashing down. Within weeks, Bitcoin began a brutal decline. By February 2018, it had fallen to $6,000. By December 2018, it was below $3,200. Most altcoins fell even harder — 90%, 95%, some went to zero. The “crypto winter” of 2018 would last two years, a bear market even more severe than 2014. Fortunes were lost. Millions of new investors — who had bought at the top — saw their portfolios devastated. Media coverage turned from euphoric to mocking. Bitcoin was declared dead, again, for the 300th time. But those who had been through 2011 and 2014 knew the script: winter was just another phase of the cycle, and spring would come.
Leave a Reply