Crypto-currency logos. Photo: Reuters/Dado Ruvic

The investment story in 2017 that took most analysts by surprise even more than the unexpected strength of the global economy has ended this year’s chapter with a cliffhanger.

Bitcoin surged more than 2,000% by the middle of December, touching just below US$20,000, after starting the year at less than US$1,000. Cryptocurrency true believers chastised the old guard of institutional investors who said at every turn that the new technology was nothing more than a speculative bubble, waiting to pop.

Each drop this year led to a new rally, including after China moved to shut down the country’s exchanges. Chinese traders moved to buy and sell bitcoin directly on peer-to-peer marketplaces, while other activity was redirected to South Korean exchanges.

The extra surge from Chinese traders helped push South Korea, described by some as “ground zero” of the global crypto surge, to implement measures in mid-December to tamp down the activity. Seoul’s increased control over the trading included prohibiting non-residents and minors under 19 from engaging in virtual currency trading.

Last week, bitcoin continued a tumble that began in the middle of the month, after Seoul signaled it may be considering shutting down at least some cryptocurrency exchanges to put a damper on speculation.

Authorities in the country also announced new requirements for real-name cryptocurrency transactions and imposed a ban on the offering of virtual accounts by banks to crypto-exchanges, according to media reports.

“The government can’t leave the abnormal situation of speculation any longer,” Bloomberg quoted a South Korean government statement as saying.

If you’re expecting this latest round of regulations to stop bitcoin’s meteoric rise in its tracks, the asset’s track record has something to say about that. After a drop amid China’s September crackdown on trading and closure of exchanges, the currency had erased all losses by October, before proceeding to more than quadruple in value by the middle of December.