Bitcoin's second four-year cycle became my baptism by fire in the crypto world. It all started with deep-rooted skepticism and ended with hard-won lessons. I first heard about Bitcoin back in 2015 and was already gearing up to dive into crypto when I stumbled across a comment on a developer forum. Someone asked what crypto was actually for, and got a killer response: "So bots have something to trade." That phrase hit me like a cold shower, cooling my enthusiasm for two whole years. The prospect of shuffling non-existent coins back and forth on shady exchanges seemed like complete absurdity.
Fortunately, my interest rekindled in 2017, and I overcame all that accumulated skepticism in one fell swoop, plunging headfirst into the crypto world. The timing was so perfect that six months later I was already counting my first serious capital. Which I then promptly lost. But in return, I gained something priceless: an understanding of the industry's inner workings, its hidden mechanisms and unspoken rules. Bitcoin's second four-year cycle transformed into my university of expensive lessons and remarkable discoveries.
To grasp the scale of what happened, let's go back to the beginning. In January 2015, Bitcoin was trading at $164. Over three years, it grew more than 120-fold, reaching a peak of $20,000, before dropping to $3,150 by the end of 2018. But the numbers don't tell the whole story: during these years, crypto evolved from an underground experiment to a global phenomenon. The first serious money arrived—just drops in the ocean by traditional finance standards, but enough for the "second wave cryptonauts" generation to taste real wealth.
Buying crypto back then was one hell of a quest. One does not simply buy Bitcoin with a credit card. Buyers and sellers had to hunt for each other on extremely primitive P2P platforms or complete deals offline. Every transaction was an adventure with its own risks. But the anticipation of big money drove people to overcome every obstacle. Purchased coins would first land in a personal wallet, then get sent to crypto exchange deposits, where Bittrex and Poloniex reigned supreme. Nobody had heard of Binance yet—CZ was still coding his future empire. But the market was already on fire: the ICO1 fever was gaining momentum, and the entire market grew without pause.
It was precisely then that the perfect convergence of three revolutions occurred, forever changing the crypto landscape. First: Ethereum with smart contracts opened the era of decentralized applications. The second naturally followed from the first: now anyone could create their own token in a couple of hours and sell it to the world as the future currency of their application or simply as an investment asset. It didn't matter that the application existed only in a white paper, or that the team often consisted of freelancers. Tokens sold at lightning speed: some believed in their utility value within the future ecosystem, others openly speculated.
The third revolutionary force was Binance, which democratized trading and made it simple and accessible for everyone. You no longer needed a brokerage account or to pass investor accreditation. Anyone with internet access and a few hundred dollars could feel like a Wall Street trader. Sure, the portfolio didn't contain millions, but the thrill was real, and the profits tangible. The morning ritual of checking your portfolio became a new religion, and every day the market rewarded the faithful with green numbers.
Hundreds of thousands of new participants from around the world flooded into crypto. They came with different goals, but all roads inevitably led to the exchanges. Even die-hard technological idealists eventually found themselves studying charts and calculating ICO returns. This mass fever created the perfect storm that propelled Bitcoin to the $20,000 mark. The collective euphoria reached such heights that $100,000 seemed just a couple of months away. But behind the apparent chaos lay clear logic: three technological revolutions happened simultaneously and amplified each other.
And first on this list rightfully stands Ethereum with its smart contracts. If Bitcoin gave the world digital gold, then Ethereum gifted an entire universe of programmable agreements. Vitalik Buterin, one of the protocol's creators and its public face, didn't just create a new blockchain. He opened a portal to a parallel dimension of finance where code becomes law. The scale of possibilities that emerged exceeded the wildest fantasies. But like any newborn universe, this one required time to mature. Infrastructure had to be built, bitter lessons learned, and new rules mastered.
The first serious test didn't take long to arrive. On June 17, 2016, The DAO was hacked—an ambitious experiment in creating a fully autonomous organization. The idea was revolutionary: a traditional company, but without directors or managers, governed only by code and collective decisions of token holders. Anonymous investors vote, smart contracts execute. No bureaucracy, complete transparency. The DAO raised an incredible 12.7 million ETH (around $150 million), breaking all crowdfunding records. It seemed the future had already arrived.
But the future glitched. A hacker found a loophole in the code and drained 3.6 million ETH. Technically, he didn't hack the system—he used its own logic against its creators. The attacker even hired a lawyer and claimed he had acted within the established rules. His argument was ironclad: The DAO itself proclaimed the principle "code is law." If the smart contract allowed the withdrawal of funds, then it's a legitimate operation. Period.
The financial and reputational blow was so devastating that Vitalik Buterin went for the unthinkable: rewriting the entire blockchain's history. Technically, this was a hard fork, creating a new version of the network where the hack simply never happened. As if you could rewind time and prevent the catastrophe.
The original chain continued to exist under the name Ethereum Classic, preserving both the memory of the hack and faith in the immutability of code. A philosophical paradox emerged: which of the two realities was real? And a dangerous precedent: if history could be rewritten once, what would prevent doing it again? The Bitcoin community had never taken such a step, even when Mt. Gox lost 850,000 BTC, or 7% of all coins that existed at the time.
The scandal shook the entire crypto community. ETH price plummeted from $10 to $6, and many predicted a further plunge into the abyss. It seemed Ethereum was doomed: who would trust a blockchain that rewrites its own history? But something unexpected happened. The drama with the hard fork became the most massive and successful PR campaign for the new network. Developers from around the world became interested in the platform and the possibilities it offered for creating startups.
Today, the question "which Ethereum is real?" sounds absurd. The main network has advanced light years ahead: thousands of applications, transition to Proof of Stake, billions in DeFi. Ethereum Classic remains a reminder of those events, as well as a coin listed on all major exchanges, making it an interesting speculative asset from bygone times.
The DAO story paradoxically opened thousands of developers' eyes to Ethereum's true potential. Now they saw not just another blockchain, but a convenient environment for experiments and creating services truly impossible in traditional finance. Impossible not only due to strict regulations and fierce competition, but because smart contract code executes itself, without judges, notaries, or intermediaries.
Cryptocurrencies stopped being mere tokens for speculation. They transformed into fuel for an entire universe of decentralized applications. Ethereum laid the foundation for Web3: without it, there would be no DeFi, no NFTs, no GameFi, no RWA, nor thousands of other innovations that seem obvious today. Smart contracts changed the rules of the game forever.
And the first mass application of this new power was the ICO mania. Suddenly, absolutely anyone could issue their own token and sell it to the entire world. No presentations to investment bankers or roadshows to venture capital offices. Just write a smart contract and whitepaper, craft a compelling story, and launch the sale. This was the Wild West of crypto finance: IPOs without regulators, crowdfunding without limits, a genuine gold rush in the age of digital money.
By the end of 2017, the ICO fever reached its peak. The market literally went insane. Programmers transformed into startup founders, students played venture capitalists, and housewives studied whitepapers over breakfast. Everyone was buying tokens with vague promises of future utility in non-existent applications. This inevitably brought associations with stocks, which of course wasn't true, but that didn't stop most people from believing it.
Then the real madness began. Inboxes overflowed with ICO offers, each more absurd than the last. People tokenized everything imaginable: gold mining, sand quarries, square meters of real estate, and even adult entertainment services. ICO builders appeared, where you could launch your token sale in five minutes. Just fill out a whitepaper template and think up a ticker. The apotheosis came with the launch of Useless Ethereum Token with its honest slogan: "You're giving me money, I'm buying myself a TV." Even this obvious joke successfully completed its fundraising. FOMO reached such proportions that rational thinking switched off completely. Everyone searched for that unicorn token that would make them rich.
The statistics were merciless: two out of three ICOs turned out to be pure fraud. And that was the optimistic scenario. The scheme worked like clockwork: collect money, delete the website, erase social media traces. Ether from the fundraising address flowed to exchanges and dissolved into obscurity. But the bubble's paradox was that even outright scams managed to grow in price. And if you managed to buy tokens from a project that didn't close immediately, and even got listed on Binance, that was a direct path to hundreds of X in profits. The key was to hit the "sell" button in time. Those who hesitated or believed in long-term prospects were left holding bags of dead tokens. A reminder of empty hopes for the bull market's second coming.
The third act of the revolution was the rise of crypto exchanges and the profession of crypto trader. The main role in this belonged to Binance, an exchange that captured half the world's crypto volume in just months, leaving competitors far behind.
Changpeng Zhao, or simply CZ, made a brilliant strategic move. In the summer of 2017, while traders cursed Poloniex and Bittrex for clunky interfaces and delayed listings of new coins, CZ launched the Binance ICO. The exchange's BNB token wasn't meant to be just another useless token. Its holders received a 50% discount on trading fees. That's real savings for active traders. So along with investment, Binance gained an army of future users who were invested in the platform's success and immediately moved their trading deposits there.
The results exceeded all expectations. BNB rocketed from its $0.10 ICO price to $25 at the January 2018 peak, a 250x gain. But the token's financial success pales compared to what Binance did for the industry. The exchange gave traders what they desperately needed: lightning-fast order execution, intuitive interface, and deep liquidity. Here you could trade anything: from Bitcoin to the token of the hottest ICO that finished an hour ago. And you didn't have to worry about orders executing at terrible prices due to lack of liquidity. BNB became an example of how to create a useful token, not empty speculation. Later, Binance continued expanding BNB's utility, creating a foundation for long-term growth.
Crypto trading became a global phenomenon. Office workers checked charts between meetings, students traded during lectures, taxi drivers discussed altcoins with passengers. The market grew so rapidly that all you had to do was buy any coin from the top 100 and wait. Portfolios doubled every month. Even dead projects without teams showed green candles. This was the golden era when losing was simply impossible.
Binance found the sweet spot between security and speed. Projects were vetted for scams and fraud, but not for months like competitors did. Fresh ICOs hit the exchange within days, sometimes right as fundraising ended. The success formula was simple: Binance listing equals guaranteed price pump. Traders knew this and camped at their monitors, waiting for new listing announcements. The first minutes of trading resembled madness: prices soared hundreds of percent within an hour. Each such success story attracted new traders to the platform, creating even bigger crowds at the next listing, and new projects willing to do anything for that coveted announcement from CZ. A spiral of success that seemed to have no end.
Worth mentioning another player that still remained in the shadows: the stablecoin Tether (USDT). Though I didn't include it among the main drivers of the second cycle's evolution, the project already existed back then. However, it was a niche tool for major players and exchanges. Regular traders barely used the stablecoin in their work. Profits were measured in BTC, which was also the quote currency in trading pairs. All altcoins were bought and sold for Bitcoin, and the dollar seemed like something alien. The real era of stablecoins was yet to come.
Technical limitations played their part too. Tether operated on Bitcoin's blockchain through the Omni Layer protocol, and it was slow and expensive. Corporate clients tolerated it, but regular traders found it easier to stay in Bitcoin. The turning point came at the cycle's end when Tether migrated to Ethereum. Fast and cheap transactions opened the door to mass adoption. Exchanges began adding USDT pairs, and traders discovered the convenience of locking in profits in dollars. But this was just a warm-up for the next cycle, where stablecoins would become DeFi's circulatory system.
While the technological infrastructure was rapidly evolving and maturing, the human side of the equation remained far more complex.
No matter how revolutionary the new technologies promised to be, the path to them wasn't easy for ordinary people. Newcomers were met by two camps of skeptics, and both sounded convincing. The first shouted: "Crypto is a bubble! A pyramid scheme! The tulip mania of the 21st century!" They predicted a crash that would bury everyone who dared to enter. The second camp discouraged with sadness: all the best opportunities were already gone, they said. Bitcoin had already grown thousands of times, and such growth would never happen again. Between fear and regret, many were lost, unable to take that very step that could have changed their lives.
The standard-bearer of skeptics and doomsayers was Peter Schiff, an American economist who turned Bitcoin criticism into a personal brand. Since 2012, every interview follows the same script: Bitcoin is a bubble, buy gold. You have to admire his persistence: predicting Bitcoin's crash for thirteen years straight while watching it grow requires nerves of steel. Such endurance could only be matched by his opponents, the Bitcoin maximalists, who were often dismissed as mere cultists. The irony is that while Schiff maintained his reputation, earning new airtime and fees, all those who listened to his advice and bought gold bars could only watch as Bitcoin outperformed the precious metal by thousands of times.
However, Peter Schiff had reasons to consider Bitcoin maxis cultists. The crypto community of the early years indeed resembled a religious congregation. HODLers2 gathered on forums like early Christians in catacombs, strengthening each other's faith despite the mockery of the outside world. Faith that no one else shares is often called madness. And that's all they were called: lunatics, pyramid victims, tech fanatics. But it was precisely this irrational devotion to the cause that allowed them to survive panic crashes, exchange hacks, and government bans. In the end, the line between visionary and madman is determined by the outcome. Satoshi's followers got lucky: their "madness" turned out to be foresight.
The second camp of skeptics tormented newcomers with a different fear: "You're too late." This mantra has echoed through crypto since 2011, when Bitcoin first reached a dollar. The next levels at $100, $1,000, $10,000 also became powerful psychological barriers to entry. And right now we're standing before the next wall at $100,000. The paradox is that the "latecomers" of each cycle become the "early" investors in the next one. Those who overcame their fear in 2017 at $5,000 look like geniuses today. And those who listened to the skeptics are still waiting for their perfect entry point.
These same demons tormented me at the beginning of my journey. Fear of being late battled with fear of losing money. Fortunately, curiosity proved stronger than all fears. And although my own entry into crypto happened when the cycle was already gaining momentum, I managed to catch the main growth wave, so I rarely regretted the lost time. Though I won't deny that thoughts like "ah, if only I could go back to 2011 with today's knowledge" visited regularly. But I doubt there's a single person in this industry who hasn't fantasized about mining Bitcoin on their home computer and getting 50 BTC per block.
At that time, I was watching Ethereum, following the ecosystem's development. As a developer, I was primarily interested in the technical side. But when the price shot up from $10 to $50 in just a couple of weeks, the technical side took a back seat. This fivefold surge was the last straw. Putting all other matters aside, I dove headfirst into crypto. Yes, like many others, plain old FOMO brought me to crypto. The fear of missing my chance at big money proved a more effective motivator than interest in revolutionary technologies or belief in a decentralized future.
I started with mining. Back then, it seemed logical to mine coins rather than buy them. Ordering ASICs from Bitmain's website was like playing the lottery. Sales opened in batches and closed within minutes. Meanwhile, the site hung from DDOS attacks, making it practically impossible to buy anything. But by some miracle, I managed to order my first batch of equipment: not just S9s for Bitcoin, but also miners for DASH and Litecoin.
The results were predictable: Bitcoin mining paid off, while the other ASICs turned into expensive space heaters. Bitmain was notorious for mining with new equipment first, only selling it to the market once difficulty skyrocketed. Today, the Bitcoin mined in those years is worth a fortune, but back then I was drawn to more exciting pursuits.
The thrill found its outlet in trading and ICOs. The 2017 market forgave any mistakes: buy a random coin, wait a week, double your capital. Against this backdrop, mining with its roaring ASICs seemed archaic. My first attempt at day trading quickly sobered me up: without knowledge and experience, I was bleeding money faster than the miners consumed electricity. And boy, did they consume a lot. The electricity bills alone could power an aluminum smelter.
So with a smart look on my face, I switched to investing and started assembling portfolios of altcoins and ICO tokens. That's when they earned their nickname in the crypto space: shitcoins. The morning portfolio check became mandatory: green numbers pleased the eye and fed the illusion of mastery.
ICO investments were like a lottery: half of the dozen projects disappeared the very next day or a week after fundraising. Working on project analysis helped avoid obvious failures, but even those who genuinely tried to build something mostly couldn't withstand the competition. Though there were plenty that multiplied investments tenfold. There was money to be made here, but only those who immediately took their profits when the time came and never looked back succeeded.
I couldn't do that. I either sold everything too early, scared by the first correction. Or if by pure luck I held until the right moment and sold with big profits, I'd immediately rush to reinvest everything, thinking the rocket would fly forever.
These and other mistakes led me to a point where by mid-2018, all that remained of my profits were screenshots. The portfolio I admired every morning had turned into a graveyard of dead tokens. But strangely, instead of despair, I felt the thrill of an explorer. Since there was nothing left to trade, I decided to figure out how this machine worked from the inside. While the market froze, gripped in the jaws of crypto winter, I studied Solidity and created my own NFT collections. In 2018, nobody believed in the future of digital art on blockchain or that some JPEGs would be worth millions. Ah, if only I had continued those experiments. But missed opportunities are the best teachers.
The technical deep dive opened my eyes to Bitcoin's true nature. I finally grasped the distinction: Bitcoin is digital gold and hard money, while all other crypto projects, despite using blockchain, remain startups at heart. But the main lesson of the second cycle turned out to be simpler: don't wait for a massive crash to start learning about crypto. The perfect moment will never come.
Every stage of the cycle offers its own opportunities. It's a fast and fluid process that requires constant attention. And for that, you need to acquire knowledge and skills. It's always better to start small: create a wallet, buy your first portion of Bitcoin and put it on a hardware wallet3. And of course, understand the mechanics of DeFi and Web3. When your moment comes, you'll be ready. And it will definitely come. Crypto always rewards the prepared.
But however important technical knowledge and proper preparation might be, crypto cycles follow their own laws. The unstoppable spiral of success simply couldn't last forever. By the end of 2017, the entire market reached a state of absolute euphoria. Bitcoin practically touched the $20,000 mark, Ether soared to an incredible $1,440, and even garbage tokens grew 100% daily. Mass hysteria reached its peak: people quit their jobs, sold apartments, took out loans. It was good if they bought Bitcoin. But most invested in promising altcoins, hoping to catch up to and surpass Bitcoin's growth.
This was the cycle's highest point, and few guessed that crypto winter was already at the gates. Winter came swiftly and without mercy. Soon the market overflowed with pain, anguish, and disappointment, like a years-long hangover after an insane party. Bitcoin plunged 85% from its peak, Ether lost 94%. Yesterday's millionaires woke up broke. Forums that recently buzzed with ecstatic posts about expensive cars and watches filled with stories of debt and shattered lives.
My first bear market was brutal. Every morning began with checking the portfolio and silent horror. Minus 20%, minus 30%, minus 50%... The numbers simply lost meaning. "Crypto is finished, Bitcoin will sink to the bottom and drag everyone down with it," I thought, and it seemed the entire internet agreed with this opinion. Everywhere was panic, capitulation, and the gloating of skeptics. January 2018 is forever etched in memory as the month when not just portfolios collapsed, but faith itself in the digital revolution that yesterday seemed inevitable.
Altcoins collapsed 95%, and after a brief pause, another 95%. Most never recovered. It was like an endless battle with a dragon where you take beating after beating. But unlike a video game, there's no respawn at a save point with your balance and mental health intact. The mass exodus from crypto began. People left all Telegram chats, withdrew the scraps of their deposits from exchanges, and tried to forget crypto like a bad dream. Forums emptied, only the most stubborn remained, and those who had nowhere to retreat. The survivors fell into two types: some shed their altcoins and accumulated Bitcoin and other top currencies, while others simply couldn't bring themselves to lock in a 99% loss and waited for better times.
Bear market math is merciless. The difference between an 85% drop and a 99% drop seems trivial. It's actually enormous. With an 85% drop, $1,000 becomes $150. With a 99% drop, just $10. That's a fifteenfold difference between heavy losses and total annihilation. Bitcoin fell 85%; most altcoins, 99%. The lesson is obvious: Bitcoin will multiply capital during growth, but also preserve it during crypto winter. Those who understood this in 2018 calmly weathered all subsequent storms. The statistics confirm it: the number of 'dormant' Bitcoin wallets grows with each cycle. Their owners have learned patience.
Few managed to sell their portfolios in time. When altcoins began falling, everyone waited for a bounce to recoup lost profits. The bounce never came. Then they waited for even the smallest rise to at least recover their initial investment. They didn't get that either. By the time it became clear that it was all over, altcoins were worth almost nothing. The crypto industry, like all its participants, was still a novice in the world of big money. Taking profits remained a beautiful theory from smart articles; in practice, greed and hope defeated reason. We learned from our own mistakes, and the tuition was measured in lost fortunes. But those who survived this crypto winter emerged as completely different people.
As it happened, the second cycle became the turning point for both the entire industry and for me personally. This period proved transformative for all who lived through it. And although crypto winter was an enormous trial, it was during the worst blizzards that future titans of the industry were created. Uniswap developers tested their first liquidity pools. MakerDAO refined the mechanics of algorithmic stablecoins. And the OpenSea team believed that one day people would buy digital pictures for millions. Everyone thought they were crazy, but they were the ones preparing the technological leap of the next cycle.
And this difficult time taught me to see crypto's value not just as a source of profit. Behind the volatility and speculation lies a real technological revolution happening right before our eyes. And being its witness and participant is a great privilege.
And here, I suppose, I'll confess my love for this extremely imperfect yet incredibly dynamic and cutting-edge world of crypto. It's so fascinating to be here that even video games, for me as a lifelong gamer, sometimes fail to spark such intense interest. Here you try to postpone sleep until the last moment to dig into something more. And when you finally force yourself to go to bed, you want to fall asleep quickly just to wake up in the morning and dive into the news feed, making sure not to miss anything important.
And it's this feeling that I'd like to share with you, my dear reader. If this book can convey even a fraction of this drive, ignite interest in the world of cryptocurrencies, blockchain, and Web3, then I've succeeded. Welcome to the crypto world. The game has only just begun.
1 ICO: Initial Coin Offering - a fundraising method where companies issue digital tokens to investors. Read more
2 HODL: Originally a typo of "hold," now meaning "Hold On for Dear Life" - a long-term cryptocurrency investment strategy. Read more
3 Hardware wallet: A physical device that stores cryptocurrency private keys offline for enhanced security. Security guide