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The Surge of Bitcoin in 2017 – a Year That Changed the Cryptocurrency World

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Discussing the explosive growth of Bitcoin in 2017, India’s role in the cryptocurrency sphere, and concerns about cryptocurrency security

The Bitcoin Roller Coaster: What Happened?

Around the same period last year, the crypto world was not yet the hype as it is now and global awareness was relatively limited. Those who showed interested were mostly Bitcoin and blockchain technology fans.

Fast forward one year and things look dramatically different. What happened in 2017 that changed the global role of cryptos in the financial markets? It’s an ideal moment to look back at the 2017 crypto rollercoaster.

Let’s recap what happened: the price of Bitcoin in January 2017 was around 900 dollars but there was no stopping price during the year. Price went up on a monthly basis and around June-August price had increased to the 2000 – 2500 dollars zone. This was basically the start of an extreme bullish period that lasted till end of the year when Bitcoin ended up reaching the all-time record of nearly 20.000 dollars.

Bitcoin’s Surge Explained

What caused this major surge? In our opinion this is mainly caused by the worldwide media attention around Bitcoin. For instance, there were news reports about the very first Bitcoin millionaires and of course, about the many new higher highs in price.

The constant uptrend created a positive feedback loop as more and more Bitcoin sceptics changed their view and decided to buy the cryptocurrency. All in all, the potential high gains were too alluring to resist for a growing audience.

For weeks Bitcoin dominated the financial news and people and this triggered the curiosity of people as they started to learn about Bitcoin in specific and cryptocurrencies in general. Investors, who believed that they had missed the train, jumped on board at different stages.

Furthermore, the media attention created much more awareness and this resulted in Bitcoin being accepted and embedded on a wider scale. Everyone is talking about Bitcoin, from investor billionaire Warren Buffett to powerhouse investment firm Goldman Sachs.

Impact Bitcoin on other Cryptocurrencies

The surge of Bitcoin in 2017 had a very positive effect on the other Altcoins and ICO’s. Since early December 2017 a lot of new investors are seeking their fortune in alternative cryptos. Why? Because the entry level of Bitcoin will be too high for most starting crypto investors.

Other coins and projects provide a low entry level and also have potential to grow – as we have seen with for example Ripple and Ethereum. Both cryptos could challenge Bitcoin for the leadership role in 2018. The total market cap exploded from 400 billion to 800 billion with potentially reaching the trillion-dollar barrier in 2018.

Yes, there are many cryptocurrencies floating around at the moment. The good news is that you don’t have to be an expert to participate.Just a bit of research online and some reading will give you the knowledge you need to get an account at an exchange and start buying ICOs.

India’s Role and Stance versus Cryptos

South Korea and other Asian markets have contributed most to the growth of Bitcoin and other cryptos, including India which has been a major factor in the Bitcoin surge as well.

India, one of the world’s most upcoming economies and population wise number second in the world behind China, contributed a lot to the surge of bitcoin in the last months of 2017.

India has always been historically interested in Gold and many are seeing cryptocurrencies in a similar light. They are not the only one as investment bank Goldman Sachs declared on January 10 that Bitcoin is the new gold.

Although the authorities regulations around Bitcoin, like in many other countries are still not yet clear, the five biggest exchanges in India experienced a surge in new investors in 2017. Traders are now able to buy BTC with Indian Rupees.

The reason for this popularity in Bitcoin started after the Indian government announced their intentions at the end of 2016 to limit the available amount of cash and to ban 500 and 1000 Rupees notes. The goal was to fight corruption and the black money circuit on the one hand and on the other hand to stimulate use of digital transactions.

The people, especially young professionals started, to search for alternatives and found this in in BTC and cryptocurrencies.

In 2018 it will be very interesting to see how the Indian government will react on the Bitcoin and crypto currencies. Here basically also implies a risk in case the Indian government will ban BTC, which can lead to a drop and bounce in the BTC value as what happened in the case with China.

There were fears in the first days of 2018 that South Korea would ban trading in cryptocurrencies. Financial regulators are clarifying that they are not banning all crypto transactions. According to the Forbes article, “Korea’s top financial watchdog, the FSC (Financial Services Commission) Chairman Choi Jong-ku noted that the ministries are in discussion over the extent of trade regulation.”

Are Security Fears Valid?

Last but not least, how safe is trading and investing in cryptocurrencies? During 2017 several media reported hacks of Bitcoin and other crypto currencies.

Although the blockchain technology and transaction itself was unhackable till now, cybercriminals managed to attack exchanges and wallets of users. This is their aim and therefore safety restrictions are very important. Basically this also happens in our current payment methods, where not transactions but accounts are hacked.

Whether the technology itself is indeed unhackable in the future remains to be seen. Quantum computers and cryptocurrency is another interesting topic. Crypto world could faces security fears especially with the emergence of the new wave of computational powers. These computers could become so fast that the private key codes and blockchain that protect the current cryptocurrency investors might become under seige if the cryptocurrencies do not evolve further protective measures.

For now, the best protection is to keep your coins offline in a hardware wallet like the Nano ledger S and for sure always use a 2 way authentication factor on your accounts.

Authored by  Christopher J. Svorcik, Forex Trader, Technical & Wave Analyst, FX Education, EliteCurrenSea, Admiral Markets

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