Bitcoin was the wonderkid of the financial markets in 2017 with the price of the cryptocurrency, once dismissed as something reserved for the geeks, cryptography enthusiasts and the darknet, skyrocketing to unprecedented levels, alternating with several nosedives.

However, the eye watering drop in the price of Bitcoin and its rivals this week on fears of potential crackdown in two leading markets, South Korea and China, has left many doubting if the cryptocurrency bubble has indeed burst.

A look into what was the buzz around Bitcoin.

The digital currency world had dubbed it the face of the future and it was exactly such hubris that was making the bubble warnings from observers in the traditional finance grow louder each passing day.

While Bitcoin did return to the limelight in 2016 after a lull, it is only this year that it grabbed the entire world's attention as its price soared and there were some measures of acceptance into the mainstream asset market. A clone of the currency, named bitcoin cash, also emerged in August last year.

The price of Bitcoin surged nearly 20-fold, or over 1,900 percent, in 2017, from under $900 at the start of the year to a record high of almost $20,000 around December 17.

Amid repeated calls for caution, the price of Bitcoin plummeted nearly 15 percent on December 22 to below $13,000, just days after futures trading in the cryptocurrency began.

On January 18 this year, Bitcoin fell below $10,000 for the first time since December. As of 5.30 am ET on Thursday, the cryptocurrency was up 9.33 percent at $11,235.35 on coinbase.

Chicago exchanges CME Group and CBOE Global Markets launched futures trading in Bitcoin in December. The NYSE filed an application with the Securities and Exchange Commission on December 20 to list two exchange-traded funds, or ETFs, tracking Bitcoin futures.

Though such moves added some legitimacy to Bitcoin, analysts and observers are keeping their fingers crossed over its future, thanks to the notorious volatility linked to the cryptocurrency. Welcoming cryptocurrencies into the mainstream could bring them under some regulatory supervision, they hope.

As the crypto-world went gaga over the recent appreciation of Bitcoin and other crypocurrencies, voices of caution kept growing louder. Central banks and governments repeated their warnings of an asset bubble waiting to burst.

Traditional finance has kept cryptocurrencies at arm's length, but many investors and bankers are positive about the future for the distributed ledger technology or blockchain that underlies them.

Billionaire investor Warren Buffett has warned that cryptocurrencies are set to have a bad ending and he would not bet any money on them.

The Bank of America's brokerage arm Merrill Lynch reportedly banned its clients and financial advisers from buying bitcoin-related investments due to concerns over the investment standard of the cryptocurrency and related products.

Meanwhile, hackers are busy revealing vulnerabilities in the cryptocurrency protocols, challenging developers to come up with more secure solutions to fulfill the decentralized peer-to-peer network dreams.

It is mainly the freedom linked to Bitcoin and its rivals that is attracting users to the cryptocurrencies, which are digital currencies not issued or controlled by any centralized authority such as a government, central bank or even a company, and hence, it is not regulated.

Another factor that was driving the Bitcoin price is the fact that its supply is limited.

The algorithm that governs Bitcoin generation prescribes that bitcoins will be created when a new block is added to the network, which will be the mining reward. There will be a finite supply of 21 million bitcoins in the currency's lifetime. The number of bitcoins is set to halve every 210,000 blocks, which is likely to occur once in roughly four years.

In July 2016, the Bitcoin mining reward was halved from 25 to 12.5 bitcoins. The next halving is expected to occur in 2020.

Some are also attracted to the intrigue linked to Bitcoin as its origin remains murky. And the perceived anonymity linked to Bitcoin transactions has also retained it as a darling of the darknet.

The real identity of its creator, who used the pseudonym Satoshi Nakamoto while proposing the digital currency in 2008, still remains a mystery, despite years of investigation by cryptocurrency enthusiasts, journalists, government authorities and so on. Several theories are prevalent and some contenders have also come forward.

Beyond the regulatory control, the relatively young decentralized digital currency Bitcoin and its rival crypocurrencies, still remain a high risk investment for investors. Their highly volatile price validates the view and they are vulnerable to hacking attacks that could erase a holding entirely.

And governments and regulators are yet to figure out how to approach cryptocurrencies, though they have begun to tax transactions involving bitcoins.

China and South Korea, which are the main two markets for cryptocurrencies, are leading the group of countries that have initiated regulatory measures to curb the excessive speculation in cryptocurrencies.

In September last year, China banned initial coin offerings, or ICOs, the crypto-world equivalent to initial public offerings of company shares.

New measures by the South Korean government require real-name accounts for cryptocurrency transactions, starting January 20. The country also plans to have a new law to ban cryptocurrency exchanges, thus effectively preventing trading in these currencies.

This week's sell-off in the cryptocurrencies that saw Bitcoin tumble below $10,000 for the first time since December was triggered by comments from the South Korean finance minister Kim Dong-yeon that banning digital currency exchanges was "a live option."

Other countries are also exploring measure to curb the excessive exuberance surrounding cryptocurrencies. Governments are concerned that these unregulated and decentralized currencies would facilitate money laundering and would be used to fund criminal activities such as drug-dealing and terrorism.

Bitcoin had already found wider acceptance in the real economy with big companies such as Microsoft and Dell embracing it as a payment option for their digital services.

The cryptocurrency is also finding use in physical stores and in crowd-funding initiatives. A Japanese company is also planning to pay part of its employee salaries in Bitcoin. In countries with troubled economies such as Venezuela and Zimbabwe, people have been using cryptocurrencies to bypass government controls.

The blockchain technology that is underlying bitcoin has found greater acceptance in fields beyond finance such as pharma, government services and even in distributing aid to refugees.

The Dubai government has made a road map to embrace blockchain on a large scale to realize the dream of a paperless and cashless society by 2020. The city plans to launch its own crypocurrency emCash.

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