In today's market, when the Bitcoin price dips, the rest of the cryptocurrencies tend to follow suit. Photo: iStock
The lowest yuan/dollar daily reference rate in more than a decade seems to have sent traders flocking to Bitcoin. Photo: iStock

This year started off with a bang as digital currencies recorded their highest prices ever, breaking record after record. The crypto-sphere was awash with talk of “going to the moon,” a term for the huge price spikes, and ‘lambos’ referring to buying the fabled Italian sports car from crypto trading profits.

One year later and these heady times have become a distant memory as markets wiped out more than $US700 billion and crashed by more than 80%. Many newbie traders have exited the markets with burned fingers and only those who bought early in the previous year will not have suffered such huge losses.

One of the largest hacks of all time happened in January when Japanese exchange Coincheck lost more than US$500 million in digital tokens. By early February, Bitcoin had crashed more than 60% and most of the initial coin offering projects held the previous year had failed to reach their targets.

Aside from the year-long bear market, there have been a number of key developments in the crypto-currency and blockchain industry during 2018.

In March the G20 Financial Stability Board declared that digital currencies were not a threat to the global banking system which could be seen as a boost to the nascent industry.

By April the NASDAQ was dabbling into crypto-currencies with the CEO announcing plans to get into the industry. Goldman Sachs was also rumored to be entering the fray, however, this remained a rumor and the Wall Street bank had yet to make any official announcements. Still, the hope of financial institutions getting involved was not enough to keep markets sliding further.

By mid-2018, Facebook and Google were banning crypto advertising but still allowing scams to proliferate on their platforms. They have both since partially lifted this ban, recognizing the power of the buck outweighs any moral obligations they may have towards their users.

In August the regulators waded in, with the US Securities and Exchange Commission being the weightiest. Nine crypto-currency ETFs were rejected by Washington, including one from the Winklevoss twins who have since gone on to launch the Gemini exchange and their own stablecoin, GUSD.

Markets plateaued in September and October and remained in a sideways channel for 10 weeks. October also marked the 10th anniversary of Satoshi Nakamoto’s Bitcoin whitepaper.

By November rival clans of the Bitcoin Cash communities battled it out online as a hark fork, or split blockchain, approached. This appeared to accelerate market losses which plunged through the floor in mid-November, dumping 50% in a matter of weeks.

By December crypto-currency prices were on the floor and mainstream media was having a ball spreading stories of doom and gloom.

In Asia, China has continued to stamp its angry feet on anything crypto related, and India has not been far behind with no real progress there for the industry. Japan and South Korea have been working on regulatory frameworks to protect investors from scams and Singapore has positioned itself as the blockchain hub of the region.

Thailand and the Philippines also adopted a more welcoming approach to digital assets in 2018.

The big crypto exchanges such as Coinbase, Binance and Huobi have been aggressively expanding despite the bear market. Switzerland and Malta have become top destinations for crypto startups.

San Francisco-based fintech company Ripple has recruited more than 100 banking partners to its payments network and its XRP token is now the second most popular crypto-currency in the world, after Bitcoin. Ethereum has fallen out of favor, for now, as the ICO market has halted and it has still not solved its scalability problems.

In 2018, mainstream media has taken a big interest in crypto-currencies with nearly every outlet covering some aspect of the industry. Bitcoin has now become a household name, whereas just a couple of years ago it was a thing for geeks to do in their garages with computers.

Crypto has come a long way in the past year or two and the bubble-like market action over the past 12 months is a testament to this infancy. Many have compared this phase to the 1990s for the internet and, if this is the case, there is a long way to go for blockchain and crypto assets. The journey might have only just begun.