The journey of Bitcoin in 2017: Cryptocurrency adds yet another zero

Also Read: Busting the myths on bitcoins

Bitcoin's value fluctuated below USD 2,000 in the first five months, however, it gathered the government's attention well before it reached a new high of USD 2,000 mark on May 20.

In March, the Reserve Bank of India had cautioned users, holders and traders of virtual currency, including Bitcoin, about the potential financial, legal and security risks arising from the usage.

The central bank had said the use of virtual currencies like Bitcoins are not authorised by RBI and could result in the breach of anti-money laundering provisions. This led to a new direction of talks around whether or not Bitcoins will be regulated by the Indian government.

Also Read: Modi govt warns against use of Bitcoins, says can attract anti-money laundering law

In June, after Bitcoin reached another new high of USD 3,000, the government appointed a panel comprising officials from the Finance Ministry, NITI Aayog, Ministry of Information Technology, State Bank of India and the Reserve Bank of India (RBI) to decide whether India should regulate or legalise virtual currencies such as bitcoins.

While the fate of bitcoin and other virtual currencies hung in the balance after the formation of the panel, one of the government officials in July told Moneycontrol that bitcoin and other virtual currencies are unlikely to be declared illegal in India, bringing relief bitcoin-watchers.

Nevertheless, like the value of any paper currency keeps fluctuating depending on various events across the globe, Bitcoin's value fluctuated as well because of its scaling debate across the globe.

Also Read: What is Bitcoin and how it changed concept of money forever

The global debate reached a point what many people called a 'civil war' in June — where the cryptocurrency faced a 'hard fork' that threatened the Bitcoin community to split in two to make the currency’s software protocol to allow it to meet the increased demand and handle more transactions — the valuation of the cryptocurrency fluctuated further.

The scare of a probable hard fork led to a massive sell-off in the cryptocurrency market in the last week of July, where it nearly lost half of its market cap as speculators remain jittery ahead of the conclusion of the debate on August 1.

Also Read: Volatile and interesting months ahead for bitcoin: Charles Hayter on Bitmain's hard fork

After the split was made official on the eve of August 1, the price for bitcoin saw a minor fall in value after which it picked up again. In the same month, Bitcoin recorded three new highs of reaching USD 3,000, USD 4,200 and USD 4,700 mark.

Also Read: Bitcoin tops $4700, altcoins at new highs; a wrap of the major action on cryptostreet

Bitcoin's value kept soaring until September 13 even as the vaunted JP Morgan CEO Jamie Dimon stated bitcoin as a 'fraud' that would eventually blow up. "It's just not a real thing, eventually it will be closed," Dimon said at the Delivering Alpha conference presented by CNBC and Institutional Investor.

After the remark, Bitcoin value recorded another drop (USD 3,226.41). Later, Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund firm, also termed Bitcoin a bubble.

Also Read: Believers vs doubters — Here are experts' bull and bear cases for bitcoin

But the increased focus on the cryptocurrency only brought in more buyers, as its price kept rising, reaching the USD 5,000 mark in October.

In November, the cryptocurrency reached three new highs of USD 7,000, USD 8,000 and USD 9,000, rising up by over 900 percent in a span of nine months of 2017. During this period, the central bank reiterated its stance on cryptocurrencies saying the bitcoins will not be used for making payments and settlements for now.

In pics: Bubble or not! Facts you might not know about bitcoin rally

With the virtual currency gaining traction among investors in India, Finance Minister Arun Jaitley had clarified that India does not recognise cryptocurrency as legal tender.

The ballooning prices then drew the attention of other regulatory bodies in India including SEBI, Enforcement Directorate, Income Tax Department and RBI as they feared that a sudden spurt of numerous schemes offering investment in virtual currencies could result in losses to investors.

Also Read: Bitcoin surge, ICOs raise regulatory hackles on e-ponzi fears

In December, when the cryptocurrency broke all the previous high records after crossing USD 19,000 mark on December 17.

In the next 3 days, Bitcoin plunged by 30 percent to below USD 12,000 as investors dumped the cryptocurrency after its sharp rise to a peak close to USD 20,000 prompted warnings by experts of a bubble.

Also Read: Bitcoin tops record $19,000 on Coinbase exchange, then plunges in wild 2-day ride

Since then, Bitcoin recovered by nearly 12.5 percent till December 27, however, it struggled to hold above USD 16,000 on Wednesday.

The year recorded tremendous debate on Bitcoin, with arguments from both ends. While numerous high-profile critics and several national governments have warned of the dangers of investing in cryptocurrencies, which they say are likely to crash because nothing underpins their value, cryptocurrency traders said new highs were likely in 2018.

Cryptocurrency entrepreneur Julian Hosp says bitcoin's rapid rise isn't over yet but he also had a warning.

"I think we're going to see bitcoin hitting the USD 60,000 dollar mark, but I also think we're going to see bitcoin hitting the USD 5,000 dollar mark," said Hosp, co-founder and president of TenX, a firm that wants to make it easier for people to spend virtual currencies.