Let me first talk about the first stage: Up-and-coming.
In the early days of the Bitcoin system born in January 2009, only a few geeks led by Nakamoto used and maintained it. It was not immediately well-known until someone used BTC to buy illegal goods or services in the dark web. With BTC was anonymous and could not be unregulated, it was an excellent alternative to traditional cash for secret trades, and also the best payments method for remote illicit global transactions online. More and more people use BTC to trade in the dark web and one famous black market of dark web is a website called "Silk Road". As reports of BTC for crime on "Silk Road" began to prevail, BTC was alson known by many ordinary people. And more and more people discovered that there was such a novel currency. Accordingly, the price of the BTC relative to the legal currency soared. However, since most people are always suspicious and wait-and-see attitude towards new things, at this time, most ordinary people were just watching BTC in silence, only a few Bitcoin enthusiasts began to believe in BTC and began to mine BTC to get more BTCs.
The second stage: Prosperous of BTC.
As the popularity of the Bitcoin system continues to ferment on the Internet, more and more intellectual elites and institutions including the government began to pay more attention to it. The mysterious Satoshi Nakamoto, the genius design of blockchain technology, the price of BTC is still arrogant in the ups and downs, with all of this, the Bitcoin system is full of speculative value. More and more BTC enthusiasts who knew about economics and finance began to boast the value of BTC is terribly underestimated and would have a much higher price in the future, more and more people were rushing to BTC and push the price of BTC to go higher and higher. It seems that Bitcoin has become one of the greatest inventions of the 21st century.
On the one hand, speculative games of BTC were unstoppable, the temptation of wealth urged miners and developers to invent and create more blockchain networks. And scent-sensitive capitalists rushed to invest in construction of BTC mines and exchanges, the economic scale on the Bitcoin network and social influence of the Bitcoin system was growing fast day by day;
On the other hand, the government was surprised and upset about the Bitcoin system growing fast. As the Bitcoin system build an Internet-based trusted network that automatically transmits value without regulation by the governments, and had been issuing BTC as a currency without the approval of monetary-related agencies of governments, which had never appeared in history. As more and more people think of the Bitcoin system to be definitely the most revolutionary and epoch-making financial technology innovation in human history, the governments were afraid of such an autonomous unstoppable decentralized network system as it was regarded by more and more people as a far superior to the legal currency system and a replacement of the legal currency system in the future. And if the Bitcoin system destroyed the legal currency systems of the world, then many governments of the world will be dangerous and may fail for lake of sufficient taxes which deeply relied on the current legal currency systems. For example, if all people of the world used Bitcoin system to pay and trade, due to it is very difficult for the government to obtain detailed trading information in transactions with BTC, then taxes the government could obtained from trades will reduce. If the situation continued to deteriorate, there may be insufficient funds to support the normal operation of the government, and the government may fail due to lack of enough funds. This was why some people advocate that the Bitcoin system is liberal, anarchic, and anti-government. Therefore, the government had regarded the Bitcoin system for payment purposes as a potential threat. As a result, many governments tried to limit the development of Bitcoin system before they figured out what an unpredictable consequences of the Bitcoin system will cause. Every time the government gave out some bad news of the Bitcoin system, then the price of BTC was in crisis, the fearful investors sell out a lot of BTCs, and the greedy Bitcoin believers and speculators bought a lot at the low positions, so that the BTC went down and up again and again. With the number of people who are curious and interested in the Bitcoin system is increasing, when the bad news of the government goes weaken and more funds continue to flow into BTC, the price of BTC rise rapidly and continue to hit new heights.
Beginning around 2013, with the close observation and research of Bitcoin system by various governments, it is found out that the economic scale of commodity trading based on BTC is very small. It is expected that it is still difficult for the Bitcoin system to have some impact hard to control on the current legal currency system and the world economy in the future for a long period of time. In addition, Bitcoin represents freedom, affirmation and democracy, and is deeply loved by many people. Therefore, the government of most democratic countries began to recognize the legal status of Bitcoin system as a legal payment method for respect the opinion of the public. Around August 19 of 2013, Germany firstly officially recognizes BTC as a legal "private currency" and "private property". Since then, more and more countries began to recognize the legality of the Bitcoin system. The changes in the attitude of many big governments to the Bitcoin system had made "BTC a legitimate means of payment" widely spread out and become a popular consensus of the public. The governments' friendly attitude towards the Bitcoin system had undoubtedly given BTC enthusiasts great confidence, more of them began to invested in BTC. With more and more BTC fanatics show off rich stories of investing in BTC, BTC became more and more famous. Many people who were doubt about BTC before couldn't stand the temptation to get rich overnight and joined the trend of BTC investment. As the number of people investing in BTC continues to increase and funds continue to flow in, BTC has shown an irresistible upward trend.
What is more, BTC provided funds for ICO projects appeared later on. ICO is "Initial coin offering", it is essentially a new way of IPO. If there is a difference, that is, before the emergence of BTC, the funds raised by the traditional IPO are mainly legal currencies or other legal securities, and the funds raised by ICO are based on BTC or crypto tokens like BTC. As BTC can be exchanged to legal currency in exchange markets, raising BTC means raising the corresponding amount of legal currency. Among ICOs, the most famous one is the ICO implemented by development team of the Ethereum system, which raised 31,531 BTCs. And these funds helped the ongoing development of Ethereum a lot. Later on, the Ethereum project became one of the most famous public blockchain system and widely regarded as an upgraded version of the Bitcoin system. As it is very simple to issue new crypto tokens in Ethereum system, there came all kinds of new ICO projects issuing new crypto tokens in Ethereum system. As a result, ICO waves swept the world, hundreds of thousands of "blockchain" projects were released. Because investors are afraid of missing out investment opportunities of all kinds of ICO, as long as they feel that an ICO project with some good concepts, they can't wait to invest it. As ICO projects are not well reviewed or regulated by goverments, most ICO projects are actually scams and many blinded investors got huge losses in all kinds of ICO bubbles.
In 2017, there came many hot-spots about Bitcoin system, such as the hard fork debates of the Bitcoin system, lightning network for the Bitcoin system, the CME Group of US was about to open BTC futures and so on. There aslo came more and more blockchain medias boasting all kinds of futuristic concepts of BTC and rich stories about BTC investments. With price of BTC went higher and higher, investors' enthusiasm went higher and higher too. When BTC futures was opened on CME Group in then end of 2017, the price of BTC approached nearly 20,000 US dollars. And this point was the most brilliant moment of BTC in its history. After that, however, with BTC’s short-term good news has been exhausted, it was difficult for people to find new concepts and more good news to support the high price of BTC in a short time. As people had no more reasons and expectation that the price of BTC will go higher, therefore, it was the time of the turning point of BTC to go from the bull market to a bear market, that is, price of BTC was about to fall. Once confidence of BTC is lost, it will turn into excessive panic. After price of BTC approached nearly 20,000 US dollars, as the price had no signs of continued rise, the number of panic people gradually increased, the price of BTC fall slowly. With more and more panic people, the price of BTC accelerate its fall till the price reaches 10,000 US dollars. At this point, as the price of BTC has halved from 20,000 US dollars, more and more speculators think that BTC is oversold, so they became more and more greedy instead of panic, and they started to buy BTC and the price of BTC stopped to fall and rebounded. When the price approached about 17,000 US dollars, however, with The price is hard to surpass the previous high of $18,000, more and more greedy speculators turns back into panic and started to throw out BTCs until the price became $9000 which was half of $18,000. After a few rounds looping like this, the price of BTC continues to fall to about $3,500 in February, 2019.