By Robert Hackett
December 23, 2017

On Thursday morning, Fortune debuted online its January 1, 2018, cover story on Bitcoin’s recent market mania. Coauthored by my colleague Jen Wieczner and me, the piece dug into Bitcoin’s explosive rise and gauged the cryptocurrency’s longevity. After the feature published, I asked my Twitter followers when they expected the Bitcoin bubble to pop. “Tomorrow?” I submitted, half-joking.

Now I don’t believe in jinxes, but boy. In a span of 24 hours, the price of Bitcoin plunged 25%. Trading as high as $20,000 in recent weeks, the so-called digital gold suddenly nosedived below $12,000. Other cryptocurrencies were hit just as hard—wiping out more than $120 billion in total market value. It was an utter rout.

Fortune’s cover asked, “How High Will Bitcoin Go?” The question still holds. But you’ve got to take the long view. After all, many of Bitcoin’s most adamant backers appear to be in it for the long haul. As Chainalysis, a digital forensics firm, revealed to us during the course of our research, the overwhelming majority of people who have held Bitcoin for at least three years seem to be keeping their Bitcoin in reserve, rather than cashing out amid the frenzy. New entrants and flighty, day-trader types, on the other hand, do not seem to exhibit the same perseverance.

One of the most level-headed experts we spoke to for this feature was Brian Armstrong, CEO and cofounder of Coinbase, whose startup has benefitted tremendously from the cryptocurrency craze. “We probably are in a bubble,” Armstrong told us last week, noting that this would neither be the first nor the last. A prescient view, given the collapse that soon followed.

Already the cryptocurrency markets seem to be recovering. Bitcoin is trading back up above $15,000. Other digital assets are trending up across the board, too. All this goes to show just how blindingly brisk and bewildering are Bitcoin’s boom-and-bust cycles. Cryptocurrency investors must have an appetite for risk—indeed, a ravenous one—to remain in this game. The upside is potentially great, but the downsides are despair-inducing.

To put a twist on an old proverb: Faint heart ne’er won fair money. Enjoy the weekend—and happy holidays!

Robert Hackett


Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my, PGP encrypted email (see public key on my, Wickr, Signal, or however you (securely) prefer. Feedback welcome.


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