We've had ETF talk (that has so far gone nowhere), price predictions (wrong and right), bubble-criers (wrong or right depending on your outlook) and big swings in the bitcoin price.
Bitcoin the speculative asset has had a wild ride, but Bitcoin the technology has stayed very stable, and has been quietly putting on some muscle.
Despite the ICO madness and the 'flippening' almost occurring where Ethereum briefly looked like it might overtake Bitcoin for >50% of the cryptocurrency market share, the market has since quieted down considerably and Bitcoin has regained its dominance, currently sitting around 55% of the entire market.
The Lightning network has been implemented, used and proven to work. It's implementation chips away at one of the criticisms of bitcoin - the speed of currency transfer - but more importantly highlights a theme that has run throughout history with regard to technologies: that network effects matter.
In the 70s trains around the world were reaching the maximum speed that they could on the tracks they ran on. The way the wheels met with the rails meant that at high speeds the train would just wobble too much and even fly off the rails. People wanted to travel faster but the existing technology wasn't going to do the job. It was time for something new. Hover trains that worked a bit like an air hockey table - pumping air out onto a concrete rail allowed for much higher speeds, more efficient travel and much cheaper rails. Later maglev trains allowed for even more efficient travel and faster speeds. Today we see the same old trains with metal wheels on two expensive to maintain metal tracks. Why? Because even if those new concepts were legitimately much better, with a million miles of railway already in existence, it was easier to make incremental improvements than to rip it all up and start over.
Google some years ago ditched Google Plus and recently closed its Twitch clone Youtube Gaming. Microsoft gave up on it's phone OS and more recently threw in the towel on Universal Windows Apps and and its Windows Store. These are some of the biggest companies in the world, filled with experts in business, marketing, technology and with money to burn most countries can only dream of. They had billions to throw at these issues and their products weren't ostensibly bad. But they just had no foothold, and even billions of dollars can't easily just change the habits and beliefs of millions.
Store of Value
In the earlier days of Bitcoin, there was much talk about its utility as a currency, to buy coffees and pizzas. Today a lot of that talk has shifted to talk of store of value.
Bitcoin is a place where you can park money.
That money stands a good chance of appreciating over time given Bitcoin's deflationary nature. You can get at it whenever you want. It's extremely difficult if not virtually impossible for anyone to get at it if you don't want them to. Nobody can stop you moving it around and it may be very difficult for them to stop you from spending it too.
Network effects for modern products often work off convenience. Value is different, but value is in the eye of the beholder, and if ever there was a network effect that is going to be hard to dislodge it is store of value.
One US dollar in 1919 would today be worth one twenty fifth of it's original value. That's 4% of its original value, a loss of 96% of its value over one lifetime. Yet ask almost anyone on earth today if they want a million dollars and you can guess the answer. Gold has been money since at least 700 BC, around three millenia. Today people still buy it to store wealth.
Currencies can and do die but it takes a major effort to bring them down. Given the keys to the printing press it is possible to get people to feel like the prices are increasing so much, relative to the cash in their hand, and the hosepipe of money is being sprayed so profusely that they get an intuitive understanding that these bits of paper are actually not in themselves worth something. The confidence goes and with it goes the value as the paper is dumped in preference for other assets that aren't being duplicated like somebody fell asleep on the enter key.
Bitcoin doesn't have this particular problem, and as more people talk about store of value and use it, the larger the event is required to cause a loss of confidence.
Bitcoin is hard to dislodge and getting harder by the day, but that isn't a bad thing, it's just the way technology works.
It is in many ways right and better that a robust system, used and trusted by millions, should remain in place and that the developers should have a more difficult or boring job of adapting it rather than just throwing it away every month when a nice new clean idea comes along. The disruption of change has a cost, and that cost is high enough that it will wipe out all but the most compelling replacement ideas.
Bitcoin is on a path, doing what it always did, gaining ground, but the volume of noise produced by everybody trying to figure out what happens next is at times deafening.
The most vivid manifestation of this noise, aside from the news, is Bitcoin's price. The swings both day to day and month to month are now legendary, but what's more fascinating is that, like history, they rhyme.
Just like the loss of value given a firehose of duplication is predictable, the outcome of the halving of supply is equally trivially predictable - price increase.
Bitcoin didn't die after the 'bubble pop' when it neared $20,000, instead it fell, hit a floor, and eventually started to climb again. Just like it did the previous time, and the time before that, all just done on a different relative scale.
The chart above is more of a manifestation of human psychology, people's intuition about value, their confidence in the longevity of their predictions, and a huge layer of noise from the day to day trading of irrelevant random signals than it is about underlying developments. Store of value is a slow spreading but consistent and compelling story. Absent the a centrally-managed firehose of stupidity to turn the asset into dust, Bitcoin's story ought to be quite predictable.
The real question then is just how predictable are people en-masse?
Every time I hear a story about Edward Bernays I am surprised he managed to achieve what he did. It was news to me when I heard it that he manipulated half of humankind (women) to smoke, and that the concept of breakfast being the most important meal of the day was his invention for the benefit of the bacon industry.
His success would seem to imply the stupidity of humans as a species but I think such an interpretation is too simplistic. A more likely summation is that people are busy. People are focused on a wide mix of things that are important to them, so when they pick up a cigarette in the 1940s for the first time or buy bacon for breakfast, they don't spend hours considering and analysing their decision. They just make a quick decision with immediately available information, and move on.
Similarly, Bitcoin likely floats periodically into the conscious of most of the world, and then out again for long periods. The halving is a predictable event with a predictable outcome but most people aren't interested until they can see it happening in the near future.
Some see it sooner, others later, but as each sees it coming, on aggregate and with some proportion, they buy in. The price increases steadily until either the halving happens or we hit some other trigger point that causes the upwards snowball of not wanting to miss out on the next Bitcoin parabolic run.
Eventually the latecomers tail off and no longer outpace the people cashing out, pushing the price back down and maybe causing some kind of inverse parabolic (the 'bubble pop').
This situation can't go on forever, but the conditions for it to occur (that most people don't yet hold Bitcoin, aren't focused on it, and that they constitute a pool large enough to move the price significantly if they didn't want to miss out on the next Bitcoin parabolic run) likely still holds today.
In 2011 the pre-halving run up was around 300% with the post-halving parabolic around 100x.
In 2015 the pre-halving run up was around 180% with the post-halving parabolic around 33x.
As the absolute price of Bitcoin increases, the halving has less of an effect on the availability of bitcoins, and as more people get to know and own Bitcoins, we can expect the effect to be reduced. But looking at the above numbers, it doesn't seem like a stretch to say that Bitcoin may have some big moves up it's sleeve yet, and might give us some very interesting times over the next 18 months.