The Mainstream Crash (2017–2020): ICO Mania, Winter, DeFi Summer
The first true mainstream bubble, the brutal 2018 crash, two years of building during winter, and the surprise resurgence triggered by COVID and DeFi.
13 min · beginner · part of The Crypto Timeline: From Genesis to Today
What you'll learn
- 2017: The ICO Mania
- 2018: The First Crypto Winter
- 2019: Slow Recovery and Failed Promises
- 2020: The Pandemic Year and DeFi Summer
- For Deeper Reading
Key terms
- ICO (Initial Coin Offering)
- Token sale model that raised ~$5.6B in 2017 by selling new tokens directly to the public. Most ICOs failed or were scams. Largely replaced by IDOs and other formats post-2018.
- BitConnect
- Notorious Ponzi scheme; collapsed Jan 16, 2018 (92% crash); SEC alleged $2.4B fraud. Founder Satish Kumbhani indicted Feb 2022 (fugitive). Promoter Glenn Arcaro pled guilty Sept 2021.
- CryptoKitties
- Dapper Labs Ethereum game launched Nov 28, 2017. First viral NFT application; congested Ethereum, demonstrating need for scaling.
- CryptoPunks
- Larva Labs (Matt Hall, John Watkinson) Ethereum NFT collection launched June 23, 2017. 10,000 unique 24×24 pixel characters, originally distributed free.
- SegWit (Segregated Witness)
- Bitcoin soft fork activated August 24, 2017. Increased effective block capacity, fixed transaction malleability, enabled Lightning Network.
- Bitcoin Cash (BCH) fork
- August 1, 2017 hard fork at block 478,558. "Big Block" faction split with 8 MB blocks. Bitcoin SV further split from BCH in November 2018.
- DeFi Summer (2020)
- June-September 2020 period when total DeFi TVL grew from ~$1B to ~$15B. Catalyzed by Compound's COMP token launch (June 15, 2020) and yield farming.
- Yield farming
- Earning token rewards by providing liquidity or borrowing in DeFi protocols. Compound's COMP launch in June 2020 popularized the model.
- Black Thursday (March 12, 2020)
- COVID-driven crypto crash: BTC dropped ~50% in 24 hours (from $8K to $3.8K). MakerDAO's DAI nearly broke down due to oracle delays during the chaos.
- MicroStrategy Bitcoin treasury
- Aug 11, 2020: MicroStrategy announces 21,454 BTC purchase as treasury asset. First major US public company to do so. Saylor would continue accumulating; held 818,334 BTC by April 2026.
- PayPal crypto integration (Oct 2020)
- PayPal enabled crypto buying/selling for US users, opening access to ~400M accounts. PYUSD stablecoin would later launch August 2023.
- Square BTC purchase
- October 8, 2020: Block (then Square, Jack Dorsey CEO) buys $50M BTC. Bought additional $170M in Feb 2021.
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Open lessonEducational only — not financial advice.