Economics

The Rise and Fall of Bitcoin

Bitcoin and other cryptocurrencies rose to new heights at the end of 2017, both in terms of value and popularity. But the good times didn’t last long, and since then bitcoin’s value has fallen by nearly 50 percent.

Robert Spendlove and Joseph Mayans Apr 27, 2018

At the end of 2017, bitcoin and other cryptocurrencies burst into the mainstream consciousness with almost unreal price gains and promises of technological revolution. Often with nothing more than pie-in-the-sky ideas, many cryptocurrency projects were suddenly worth billions of dollars, with investors seeing no limit to how high prices could go. But then, almost as fast as they went up, bitcoin and many other cryptocurrencies came crashing down. With newsbreaks of government crackdowns, exchange hackings, and fake projects investors ran for the door, leading many economists to make comparisons to the tulip mania of the 1600s and the dot-com bubble of the early 2000s. However, it remains to be seen if the current downtrend is a permanent feature, or if it is just one of the many boom and bust cycles the cryptocurrency markets have experienced. As more regulatory framework is put in place and more crypto-projects turn into working products, the wild-west days of cryptocurrency will come to an end and clarity around value will emerge.

Graph of Bitcoin
Source: Coindesk

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