A brief history of Bitcoin battles.

Battle-tested

Bitcoin has overcome a number of battle tests during the last few years, as shown below by the fluctuations in its price. Below is a quick list of the most important among those tests, representing ARK's "aha moments."

The Bitfinex hack in August 2016 caused a flash crash, pushing bitcoin's price below $500on the day of the hack, at which point it rebounded strongly. The rapid turnaround seemed to illustrate that early investors understood the difference between a software flaw in an application running on top of bitcoin and one in the protocol itself. In other words, the sophistication of the market was increasing, adding to our confidence in bitcoin.

The People Bank of China's crackdown on miners in January 2017 caused more turmoil, pushing bitcoin's price back down to $789. In late 2016, China accounted for 95 percent – at times up to 99 percent – of daily volumes, causing the mainstream media to clamor over bitcoin's dependence on China. After the PBoC banned it (for the second time), its price did flinch but rebounded quickly. This time, the rapid recovery in its price illustrated that bitcoin was becoming "anti-fragile" to the regulatory actions of any one nation state, as countries like Japan and Korea quickly picked up the slack.

The SEC denied the Winklevoss Bitcoin Trust proposal on Friday, March 10, 2017, causing a weekend tailspin in the price to $935… before a rebound on Monday that set it up for a 20-fold move to $20,000 during the next nine months. While many commentators pointed to the SEC’s denial as a negative turning point, not only did bitcoin’s price reverse but the entire cryptoasset ecosystem caught fire and roared in a bull market even stronger than that for bitcoin. Ether, for example, soared from $15 to $400. This price burst illustrated that bitcoin and other cryptoassets are not dependent on traditional capital markets, and therefore could disintermediate and disrupt them.

Despite myriad concerns around scaling, forks, merchant adoption, and fees during the second half of 2017, the price of bitcoin increased nearly 20-fold to $19,500 in December 2018. That price action suggested that too much capital was chasing too few opportunities at this nascent stage of bitcoin's evolution.

Momentum reversed convincingly in January 2018 under the weight of concerns around Bitfinex and Tether, the largest dollar value hack of a cryptoasset exchange, and a slew of regulatory actions focused on cryptoassets broadly, among other pressures.