Bitcoin surges past $8,000. Is this 2017 all over again?

In the spring of 2017, after several months of sideways trading, the price of Bitcoin started rising — from about $1,000 in early April to $2,500 in mid-May. By August it was at $4,000. The trading was choppy and declines were sudden and severe, but the price always recovered, reaching new highs in a matter of weeks. In November alone, the price started at roughly $6,500 and ended at over $10,000 (all data courtesy of CoinMarketCap). 

Two years later (with a pretty terrible 2018 in between, price-wise), the price of Bitcoin is on a similar trajectory. Last week, it crossed the $6,000 mark for the first time this year. Just five days later, Bitcoin easily surged past $8,000, and it’s currently trading at $8,240 at Coinbase. The prices of other cryptocurrencies rose as well; Ethereum, which saw even bigger gains than Bitcoin in 2017, surpassed $200 for the first time this year.

The numbers have changed, and many millions were poured into blockchain-based businesses since, so the stakes are much higher this time around. 

But it’s hard not to notice the similarities. Just like in 2017, there’s fear of China banning this or that aspect of crypto. Just like back then, major cryptocurrency exchanges are being hacked, with hackers making away with millions. Famous investors like Warren Buffet are once again making fun of Bitcoin. There’s fear of stablecoin Tether collapsing — though, to be honest, this fear has been around for years and it never really went away. And again, there’s talk of institutional investors entering the space in a big way. 

Some words of caution: There’s a reason why every investment fund ever has a notice saying that past performance is no guarantee of future results. On the markets, history echoes but rarely repeats the past. The price of Bitcoin, and other cryptocurrencies, could drop sharply (as it did so many times before), and it could never recover. 

In other words: Don’t bank on Bitcoin going up to $20,000 again, just because it did in 2017. 

Still, now that traders are largely accepting the possibility that Bitcoin is in a bull market again, it’s a good moment to stop and look at the landscape.

As always, it’s difficult to pinpoint the reasons behind Bitcoin’s price surge. There’s certainly been enough bad news to give any investor pause. But there’s recently been a slew of positive news as well. 

On Monday, crypto market Bakkt said it would start testing its crypto futures market in July. Bakkt is a well-funded project which is bound to become a big player in the space, and a new way for institutional and professional investors to get into crypto. 

Monday was also the start of the Consensus conference in New York City, which has traditionally (with the big exception of 2018) been a time when prices of cryptocurrencies rise. 

Consensus is also a time when rumors fly, and we’ve already spotted a major one — that eBay might announce support for cryptocurrencies. We’ve heard nothing official from eBay on that yet, but it’s certainly possible, especially at a time when a company like Facebook is reportedly developing their own crypto coin and looking to turn e-commerce on its head. 

In any case, interesting times lie ahead for Bitcoin and other cryptocurrencies. The prices are as volatile as ever, but the underlying infrastructure has never been this solid, and the amount of money poured into the space has never been bigger.  

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.