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Flashback: Bitcoin Price Hit $20,000 Two Years Ago

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It may seem like a lifetime ago, but two years ago, Bitcoin (BTC) was trading near $20,000, surging to this price point after a multi-month price surge that brought cryptocurrencies from the doldrums of irrelevancy to the front of public’s collective consciousness.

During this time two years ago, consumers couldn’t shut up about Bitcoin and blockchain at the holiday dinner table, and the words “cryptocurrency” graced seemingly every new headline day in, day out.

Bitcoin

While it’s been over 700 days since the $20,000 peak, it’s worth taking some time to look back and reminisce on the cryptocurrency’s rollercoaster-like price action: What brought the crypto market so high? And more importantly, what has changed for the market since then?

Bitcoin’s Spectacular Surge and Collapse

In 2017, cryptocurrencies were literally all the rage. For some widely unknown reason, Bitcoin and Ethereum led a strong surge in digital assets early that year, with both assets posting strong gains, drawing in investors from the public, creating a viral loop of sorts.

At first, the surge was relatively mild, with Bitcoin ending June 2017 in the thousands, around $2,000 or $3,000. The cryptocurrency continued higher and higher, until it encountered the roadblock of negative Bitcoin-related regulation from China, which then controlled a majority of the market activity and mining (not much has changed), resulting in a dramatic 30% drop in the BTC price.

But, after this short roadblock, the cryptocurrency continued higher, surmounting $10,000 just around Thanksgiving that year. And once that level was crossed, FOMO set in, with the leading cryptocurrency soon breaching $20,000 in spectacular fashion.

Retrospectively, it seems as though mass retail mania for cryptocurrencies, driven by “money-making” opportunities namely in the altcoin portion of the industry, and institutional excitement caused by the entrance of traditional finance players like CME and CBOE pushed Bitcoin higher.

Then, just as fast as the cryptocurrency shot up, it collapsed falling quickly under $10,000 just months later, with air quickly leaving the bubble.

What Has Changed Since 2017?

A lot has changed since 2017. Like a lot, a lot. And arguably, much of the things that have changed have been positive for the cryptocurrency space as a whole.

To give an executive summary, mom and pop investors have largely left Bitcoin for greener pastures, there is now more distinct and existing regulation surrounding cryptocurrency firms and taxes, but overall, there is more institutional and governmental interest in this industry than ever before.

  • This year, the long-awaited Bakkt launched, releasing a suite of Bitcoin futures and derivative products to an institutional audience. It also launched a professional custody division to help ease investors into this market.
  • Facebook unveiled its Libra initiative, which has been subject to copious backlash from regulators the world over.
  • A number of mainstream companies, including Ernst & Young, Fatburger Brands, and Banco Santander, have begun to use Ethereum technology.
  • China has begun to formally embrace blockchain technologies and other innovations in that stack, with state-owned banks, technology companies, media companies, and other entities in the country using the technology.
  • Bitcoin exchange-traded funds (ETFs) are still something deemed verboten by U.S. financial regulators, citing concerns of market manipulation and such.
  • And much much more.

Long story short, the fundamentals of the cryptocurrency space are arguably better than ever, despite the fact that Bitcoin remains down over 60% from its $20,000 all-time high.

Sure, there is increasing pressure on Bitcoin and public digital assets as a class from China and other regulatory regimes, though it seems that human and financial capital continues to enter this space at a breakneck pace, implying that technologists and academics believe that this technology still has upside potential.



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I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact NickC@blockonomi.com

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