Bitcoin: From $4,700 to $19,500 in Three Months, Then a 30% Drop

Bitcoin: From $4,700 to $19,500 in 100 Days

In September 2017, one bitcoin cost $4,703, and the market was watching its "psychological ceiling" at $5,000. By January 27, 2018, after reaching a high of $19,500 in mid-December, it was trading at $10,600. That's a 30% drop in a single month. Four months earlier, no one questioned the price; now, no one can even agree on what it is.

Bitcoin is a decentralized electronic currency used for exchanging goods and services. It has no central bank, no issuer, and no minister to defend it on a Tuesday in Congress. Its issuance is limited by design and sustained by machines spread across the globe. From this arises everything else: if no one backs it, who is responsible when something goes wrong?

What is Bitcoin and Who Really Controls It?

The short answer is: no one. The long answer is less poetic: the network is maintained by major miners, individuals with farms of computer equipment permanently connected to the network. There's no board of directors to call, no headquarters to visit to lodge a complaint.

Regarding the supposed bankruptcy, the most repeated argument is that a bitcoin cannot go bankrupt, just like gold doesn't: its value depends on what a buyer is willing to pay, and if there are no buyers, tough luck. It's not a comfort; it's the exact definition of a market without a safety net.

How Much is a Bitcoin Worth and Why Does It Move Like That?

Between January and December 2017, the currency appreciated by 1,500%. Institutional interest also rose: 55 investment funds were already betting on bitcoin, according to the consultancy Autonomous Next, although only about 5% of traditional investors were in the market. The circulating projection, with 80% entry in two or three years, relied more on faith than on balance sheets.

In December, record after record was set: $14,000, $15,000, $16,000. And on December 8, a drop of over 12% in a single session. That's the chart that explains why the average retail investor bought late and poorly.

How to Buy a Bitcoin and How Much Does It Cost?

The usual route is through an exchange platform. That's where the friction starts: identity verification fails, accounts get blocked, and commissions appear at the end of the process. Paying with a card on Coinbase cost 3.99%; doing it by bank transfer extended the operation by four to five days.

Taxation is not a mystery: selling bitcoins is declared on income tax returns just like selling stocks. Buy, hold, and declare. What no one signs is the risk disclosure, because it doesn't exist.

Regulating Bitcoin: The CNMV, Brussels, and the Courts

In December 2017, Brussels agreed to require identification of cryptocurrency holders to curb money laundering. In January 2018, the president of the CNMV (Spain's National Securities Market Commission) advised retail investors not to buy bitcoins and reminded them that platforms are not regulated. Merkel and Macron called for coordination. And in Brooklyn, federal judges debated whether bitcoin is a security regulable like a stock.

The paradox was summarized in a retort from the debate: what's the point of regulating something whose wallets no one can touch? BTC is property, it was said, impossible to confiscate except by force.

An Irrational Religion, Digital Gold, and Inconvenient Uses

A veteran programmer in the sector, the anarchist Amir Taaki, argued in February 2018 that the community had become an irrational religion. Others, like Twitter's creator, saw bitcoin as the only currency of the future. In between, facts: Japan's GMO offered to pay salaries in bitcoins, and Singapore Airlines announced it would use the associated technology.

Outside the rosy narrative are the dirty uses: the anonymity has also served for donation campaigns by jihadist organizations, a problem the ecosystem itself grudgingly admits. Technical criticisms—energy consumption per transaction, thefts, and platform crashes—all fit in the same sentence.

On January 26, 2018, Japan's Coincheck suspended withdrawals and deposits, and bitcoin lost over 7% to near $10,000. On February 20, it rebounded to $11,500, and in March, it hovered around $10,000, its best level since January, still far from the December high.

With 55 funds involved, six major banks preparing their own digital currency, and the Spanish regulator urging caution, the issue had all the ingredients of a structural phenomenon. Also, those of a bubble. No one, neither those who saw the floor at $6,000 nor those who compared the currency to gold, had fully won the argument. It remains stuck there.