Bitcoin's Wild Ride: From $5,000 to $20,000 and Back to $5,700 in a Year

From $5,000 to $20,000 in Two Months: The Cycle That Laid Bitcoin Bare

Bitcoin wasn't created to replace the euro; it was made to test the nerves of those who buy it. Between October 2017 and September 2018, the cryptocurrency experienced one of the most violent cycles on record. It went from hovering around $5,000 to threatening $20,000 in just two months, then crashed to $5,700 by the end of the trinc summer. Those who bought high lost; those who sold at the bottom, also lost. In between, a debate raged on: is this money, a bubble, or, as the most convinced argued, the first autonomous decentralized corporation created by humans?

From October's Euphoria to the December 2017 Peak

The start of the surge was modest. In early October 2017, Bitcoin's price was around $5,000, and many already saw that as a reasonable ceiling. The conversation reflected this: some joked about the market reaching that figure, while others bet it would go up to $7,000. Nobody was talking about $20,000. Not seriously, at least.

Two months later, that figure seemed ridiculous. By mid-December, the coin surpassed $16,000 and flirted with $20,000, and the narrative shifted abruptly: the fever was no longer a niche phenomenon. One participant recounted seeing, out of the corner of his eye on an office building's reception computer, an application showing Bitcoin's price at the top. Another shared that a messaging group had been created at his company solely to discuss cryptocurrencies. The signal, they said, was unmistakable: it was going mainstream.

The technical trigger many pointed to was the arrival of futures. There were 17 days left until the CME launched its contracts, and the prevailing view was that hedging short positions would be prohibitively expensive. At the same time, exchange platforms were overwhelmed: one admitted to opening 100,000 new accounts daily, and another boasted even higher numbers.

The 50% Correction Almost No One Wanted to See

The turn came quickly and without warning. In January 2018, the price dropped to $9,982.05, a plunge of 15.13% in a single day, and the language of the staunchest supporters shifted from enthusiasm to desperate defense. What was previously a collapse was rebranded as a correction, and anyone pointing out the magnitude of the damage—a fall of nearly 50% in just half a month—was labeled a doomsayer.

There were no shortage of those who had been warning for some time. Some recalled that the chart of crypto's demise had appeared at least three times the previous year, always with the same outcome: the announced death of Bitcoin that never materialized. Others countered with the opposite argument, one that had echoed through every cycle: without wild fluctuations, there would be no opportunity, and a currency that moves every hour remains a poor choice for buying bread.

The most cited cautionary tale was that of a Western guru who, at the end of 2016, had predicted $3,000 for the close of 2017. He was spot on, yet still fell short by a factor of five. A year earlier, someone recalled, any forum would have thrown out anyone who had predicted $16,000. The lesson of the episode wasn't the accuracy, but how little forecasts matter when the market is driven by panic and greed.

Futures, ETFs, and Wall Street's Entry into the Narrative

In the spring of 2018, the market stagnated around $10,000, and the focus shifted to the big players. Payment company Square saw its stock rise 10% on rumors of Bitcoin integration, after its CEO announced trading for all his clients. Such news fueled the thesis that institutional adoption was inevitable, even if the price didn't quite trinc.

Regulation brought the brakes. The market awaited with uncertainty the SEC's decision on Bitcoin-linked exchange-traded funds, scheduled for September 30, 2018, and any sign of delay or rejection was enough to dampen spirits. Buying pressure stalled, moving averages crossed downwards, and the coin traded sideways above $5,700. The pattern repeated: regulatory expectation moved the price more than any technological advancement.

Proof-of-Work, Nodes, and Lightning Network: The Technical Battle

Beneath the price noise lay the more interesting underlying debate. One side argued that Bitcoin's security doesn't depend on the number of nodes upholding a version of history, but on the amount of accumulated proof-of-work: the chain with more spent fruta is the authentic one, even if supported by a single node against seven liars. This is the argument that separates Bitcoin from proof-of-stake currencies.

The other major dispute was scaling. Proponents of the conservative path insisted that block size should not be touched until 99% of transactions used Lightning Network, 99% of the rest used SegWit, and Schnorr signatures arrived. Only then, they argued, would larger blocks make sense to discuss. In contrast, critics maintained that running a full node is expensive, the network is slow, and fees make it unusable for small payments. The conclusion drawn by the most pessimistic was the same as today: without a visible leader, changing the protocol is nearly impossible, and they call that consensus.

Tether, Altcoins, and the War of a Thousand Coins

The internal front was also burning. The growing family of alternative coins—presented as quick and cheap solutions—generated constant suspicion: that some of their volume was used to prop up Bitcoin's price. And at the center of all doubts was Tether, the stablecoin that claimed to hold one dollar for every token issued. Due to its centralized structure, any rumor about its backing could become an earthquake.

The discussion was almost impossible to settle. Those defending the tools argued that the problem lay not in the coins, but in the structure supporting them; skeptics retorted that a currency dependent on someone holding dollars could never be truly decentralized. And hovering over it all was the reference no one dared ignore: the creator of a private currency in the United States ended up accused of counterfeiting and terrorism. Hence, the anonymity of Bitcoin's founder was seen as the most lucid decision of the entire project.

Hacienda, Montoro, and the Problem of Converting Bitcoin to Euros

For the Spanish investor, the real hurdle came when cashing out. Issuing money outside the State, someone recalled, is one of the least forgivable crimes, and that was the real reason the founder's identity remained hidden. Converting a cryptocurrency fortune to euros meant going through the taxman, and strategies ranged from tax negotiations for the wealthy to relocating to countries without capital gains taxes, with Singapore and Portugal among the cited destinations.

The other, discreet route, involved mixers and privacy coins, with calculations—not always favorable—of the commissions lost along the way. The most repeated conclusion was pragmatic: accepting the tax bite had more advantages than risking hiding the money.

Quitting Your Job and Its Bill

The cycle produced situations that now sound like snapshots from another era. One participant recounted that an employee of his had quit, claiming to have so much money in Bitcoin that he would never work again. Another related that some had already left their jobs to live off investments. The dominant reaction was caution: work, many said, is the only thing keeping the mind tethered to reality, and abandoning it can have more negative than positive effects. A lot of money would have to be offered to stop waking up early.

---

With this context, the conclusion about Bitcoin should be clear: an asset capable of multiplying by four in two months and losing half in six. What is not clear is whether the next phase will confirm it as a store of value or definitively relegate it to the bubble drawer. No one, not even the most convinced, dares to set a date.