Finance: Bitcoin went bonkers in 2017 — here's what happened as the cryptocurrency surged more than 1000%
Here's a look back at some of the significant events that drove big price swings in the market known for extreme volatility.
- Bitcoin, the red-hot cryptocurrency, had a wild run in 2017.
- Here's a look back at some of the significant events that drove big price swings in the market known for extreme volatility.
To say bitcoin had a wild 2017 would be an understatement. The digital currency, which started the year under $1,000, has skyrocketed by more than 1,300% to more than $14,500 by December 29 — a rise that's grabbed the attention of Wall Street.
That climb was marked by extreme volatility, multiple splits in its network, and naysayers who derided it as a fraud and toy for criminals.
Yet, as we enter the new year it appears the digital currency will continue to mature as a recognized asset class on Wall Street. Already bitcoin futures have begun to trade on major markets — allowing investors to bet on its price without holding the coin itself. As for its future price, some bulls see it going higher than $20,000 in 2018.
Here's a look back at bitcoin's journey in 2017:
- January 11. Anxieties over China crackdown. Bitcoin kicked off 2017 on a negative note. The coin got demolished after China announced it had begun investigating bitcoin exchanges in Beijing and Shanghai on suspicion of market manipulation, money laundering, unauthorized financing and other issues. The selling followed reports that the People's Bank of China warned investors to exercise caution when investing in virtual currencies.
Back then, more than 90% of bitcoin trading occurred in Chinese yuan and bears rushed the market sending bitcoin down to a low of $786 from a high on January 3 near $1,300.
- March 10. SEC denies permission for a bitcoin ETF. Bitcoin retested its old gains after anxieties over China wore-off. That came to a halt when the Securities and Exchange Commission denied a bid for a bitcoin-linked exchange-traded fund by Tyler and Cameron Winklevoss. The SEC cited the fact that bitcoin is traded on unregulated markets, which means the SEC wouldn't be able to prevent fraud or market manipulation.
Bitcoin went from trading near $1,300 on March 6 to a low of $935 on March 24.
- April 1. Japan declares bitcoin legal currency. Some good news came in April when Japan declared bitcoin a legal currency. At the time, bitcoin's year-to-date gains were only 19%. Today, Japan is among the strongest markets for bitcoin. Forty percent of bitcoin trading between October and November was conducted in yen, according to a Nikkei report cited in a note by Masao Muraki, a global financial strategist at Deutsche Bank.
- August 1. The big bitcoin split. Bitcoin had a relatively quiet run from April to early July. That ended when anxieties over a potential split in bitcoin's underlying blockchain network began to worry investors. After it hit a high above $3,000 a coin on July 11 it slid to a low near $1,900 on July 18. The divide was between coiners who thought the blocks in bitcoin's network should be bigger to process more information and help it scale faster. On August 1 the network split, resulting in the creation of bitcoin cash, a sort of clone of the original bitcoin.
Ultimately, investors shrugged off the split and bitcoin marched higher close to $5,000 a coin.
- September 4. China bans ICOs. Bitcoin came crashing down after China banned initial coin offerings on September 4. The fundraising method is a twist on the initial public offering process and has helped companies raise over $4 billion by offering their own tokens, according to some estimates.
Bitcoin crashed to $3,226. But then, with the exception of a hiccup when JPMorgan CEO Jamie Dimon called bitcoin a fraud, it was off to the races.
Bitcoin picked up steam, despite a wide crackdown on exchanges in China, hitting $5,000 on October 13. By November 8 it hit close to $7,500 a coin.
- Dec 1. CFTC approves bitcoin futures. Bitcoin's fall run was outdone by a rally following the Commodities Futures Trading Commission approval of requests by two exchange groups, CME Group and Cboe Global Markets, to launch bitcoin futures. The new two markets, which launched on December 10 and 18 respectively, allow investors to bet on the future price of bitcoin without actually touching the coin. It has drawn in a number of traditional players in financial services, such as brokerages TD Ameritrade and E*Trade, into the crypto-world.
Bitcoin skyrocketed from around $10,000 a coin when the news broke to a high just below $20,000 on December 18. It has since corrected and is trading around $15,000. As for the future price of the coin, Fundstrat's Tom Lee raised his price target for bitcoin in mid-2018 from $11,500 to $20,000.
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