The years 2017 and 2018 stand out as one of the most dramatic chapters in the evolution of blockchain and digital assets. From unprecedented price surges to devastating market corrections, these two years captured the world’s attention and reshaped the crypto landscape. The total market capitalization of cryptocurrencies soared from $18 billion to a peak of $644 billion in 2017—a 35-fold increase—only to crash down to $276 billion by February 2018, marking the burst of the first major crypto bubble.
This article explores the pivotal events that defined this era, highlighting technological breakthroughs, regulatory shifts, and market dynamics that continue to influence the industry today.
The Meteoric Rise: 2017 Unpacked
January – Global Adoption Gains Momentum
In early 2017, Bitcoin adoption accelerated worldwide. Hundreds of online merchants began accepting Bitcoin as a legitimate payment method, with Japan leading the charge by integrating it into mainstream commerce. This surge in usage drove mining fees to record highs due to increased network congestion.
Meanwhile, Monero made significant strides in privacy technology. By leveraging Greg Maxwell’s Confidential Transactions and enhancing Ring Signatures, Monero enabled hidden transaction amounts, solidifying its position as a top choice for untraceable digital asset transfers.
👉 Discover how privacy coins evolved during this transformative period.
March – Enterprise Blockchain Takes Shape
A major milestone occurred when leading corporations, banks, and tech firms—including Microsoft, Intel, and JPMorgan—joined forces to form the Enterprise Ethereum Alliance (EEA). With 30 founding members, the EEA aimed to develop enterprise-grade blockchain solutions using Ethereum’s infrastructure. By May 2017, membership had grown to 116 organizations, signaling strong institutional interest in decentralized technologies.
April – Regulatory Clarity Begins to Emerge
Japan passed legislation recognizing Bitcoin as legal tender, boosting investor confidence. Simultaneously, Russia proposed a regulatory framework for cryptocurrencies like Bitcoin, Dash, and Ethereum. These developments indicated a growing global willingness to engage with digital assets within structured legal environments.
In financial services, Spain’s BBVA joined RippleNet to improve cross-border transaction efficiency. This move triggered a speculative frenzy around Ripple (XRP), whose price surged tenfold within weeks, briefly making it the second-largest cryptocurrency by market cap.
May – Stellar Shines Amid Growing Privacy Concerns
Stellar launched its commercial arm, Lightyear.io, fueling a 20x price spike in Lumens (XLM). Around the same time, Monero gained notoriety when the WannaCry ransomware attackers converted their ransom payments into XMR for anonymity. The hacker group “Shadow Brokers,” responsible for leaking the exploit, also accepted Monero—further cementing its reputation as a privacy-focused coin.
June – Bitcoin Symbol Enters Unicode
A symbolic moment arrived when Unicode officially added the Bitcoin symbol (₿) in version 10.0 at code point U+20BF—signaling broader cultural recognition of cryptocurrency.
EOS also began its year-long Initial Coin Offering (ICO), which would eventually raise over $4 billion, becoming one of the largest token sales in history.
July – The Great Bitcoin Split
Long-standing debates over Bitcoin’s scalability reached a climax. Proponents of larger block sizes, led by figures like Roger Ver, clashed with advocates of SegWit (Segregated Witness), culminating in a hard fork. On August 1, 2017, Bitcoin Cash (BCH) was born, increasing block size to 8MB to support faster and cheaper transactions.
Also in July, the U.S. Securities and Exchange Commission (SEC) released a landmark report stating that DAO tokens qualified as securities under federal law—setting a precedent for future ICO regulations.
September – “9/4” Crackdown Shakes China’s Crypto Scene
On September 4, Chinese regulators banned ICOs and ordered trading platforms to shut down. This day became known as “Crypto 9/4” among Chinese investors and triggered a global sell-off. While intended to curb financial risks, the ban pushed many projects offshore and accelerated decentralization efforts.
Despite this, Stellar continued expanding—allocating $2 million in XLM for seed investments through its partnership fund. By Q3, ICO fundraising had reached $2.3 billion—over ten times the 2016 total.
October – Ethereum Evolves with Byzantium
Ethereum implemented the Byzantium hard fork on October 16—marking a key upgrade toward scalability and privacy. The update reduced complexity in the Ethereum Virtual Machine (EVM), simplified smart contract development, and introduced support for Zcash-style zk-SNARKs.
November – The Rise of In-Browser Mining
Malicious actors began exploiting Coinhive scripts to mine Monero using visitors’ CPU power without consent. While some websites used it ethically as an ad alternative, widespread abuse led to blocks by antivirus software and browser extensions.
December – Market Peaks Amid Growing Risks
By year-end, ICO funding had grown nearly 40 times compared to 2016—though still less than 2% of traditional IPO volumes. However, rising security concerns plagued exchanges: NiceHash lost nearly 4,700 BTC (~$80 million), and South Korea’s Youbit collapsed after a hack.
Steam also dropped Bitcoin support due to high fees and volatility—highlighting usability challenges despite growing popularity.
The Crash and Reckoning: 2018 in Review
A Market in Freefall
After peaking at $835 billion on January 7, 2018, the market shed nearly half its value within ten days. By December 15, total valuation had plummeted to $1 trillion—down 83% from its high.
Yet innovation persisted beneath the surface.
ICOs Continue Despite Bear Market
ICO fundraising remained robust in early 2018, driven by giants like Telegram ($1.7B) and EOS ($4.2B). Average deal sizes rose from $16M in late 2017 to $39M by mid-2018.
Regulatory clarity improved with the introduction of SAFT (Simple Agreement for Future Tokens), allowing qualified investors to legally purchase tokens under securities frameworks—enhancing KYC/AML compliance.
👉 Learn how compliant fundraising models are shaping modern token launches.
Bitcoin Faces Mounting Challenges
Bitcoin’s price dropped from nearly $20,000 to below $3,200 by year-end. High-profile exchange hacks—including Coincheck ($530M), Bithumb ($30M), and Bancor ($135M)—eroded trust. South Korea’s aggressive regulatory actions further dampened sentiment.
China’s complete ban on RMB-crypto trading slashed yuan-denominated Bitcoin volume from ~90% to just 1%. Meanwhile, Facebook banned crypto ads in February—a move followed by Google and major U.S. banks—limiting public exposure.
Lightning Network Launches Amid Growing Pains
Blockstream launched the Lightning Network in January 2018—an off-chain scaling solution enabling instant Bitcoin transactions. Initially tested on 60 nodes, it expanded rapidly but faced early setbacks: a DDoS attack in March knocked out nearly 200 nodes.
After fixes were implemented, channel capacity grew steadily throughout the year—with explosive growth observed in November.
Exchanges Race Toward Compliance
As governments tightened oversight, exchanges raced to become compliant.
- Coinbase stepped up regulatory cooperation by sharing user data with the IRS—including transaction histories from 2013–2015.
- Binance, founded in July 2017 by CZ (Changpeng Zhao), relocated from China post-9/4 crackdown, then moved again from Japan to Malta due to favorable regulations—showcasing the global nature of crypto operations.
Tether’s Controversial Role
Tether (USDT) became central to trading activity—accounting for up to 80% of Bitcoin volume by mid-2018. However, concerns mounted over whether each USDT was truly backed 1:1 by USD reserves—a claim never independently verified.
In October, USDT briefly depegged to $0.88 amid fears over Bitfinex’s liquidity—sparking panic about systemic risk. Many viewed Tether as a potential “ticking time bomb” capable of destabilizing the entire market.
Frequently Asked Questions
Q: What caused the crypto crash of 2018?
A: A combination of profit-taking after the 2017 bubble, exchange hacks, regulatory crackdowns (especially in China), and reduced speculative interest led to sustained downward pressure throughout 2018.
Q: Why was September 4, 2017, significant?
A: Known as “Crypto 9/4,” this was when Chinese regulators banned ICOs and ordered domestic exchanges to close—a major blow to market sentiment and trading volume.
Q: What is the Lightning Network?
A: It’s a second-layer solution for Bitcoin that enables fast, low-cost transactions off-chain via payment channels—improving scalability without altering Bitcoin’s base protocol.
Q: Was the ICO boom sustainable?
A: Most early ICOs lacked viable products or clear use cases. While some raised massive funds (e.g., EOS), many failed to deliver—leading to increased scrutiny and eventual decline.
Q: How did Tether affect Bitcoin prices?
A: Critics allege that unbacked USDT issuance artificially inflated demand for Bitcoin during rallies—a controversial theory known as the “Tether printing press” hypothesis.
Q: Are privacy coins still relevant today?
A: Yes—Monero and others remain popular for confidential transactions despite regulatory scrutiny over potential misuse.
👉 Explore secure and compliant ways to trade leading cryptocurrencies today.