In 2017, bitcoin became one of the market’s greatest speculative crazes. It remains to be seen whether it can live up to the hype.

Even bitcoin’s supporters were surprised by how far the cryptocurrency rose. Starting the year at about $970, it rose to nearly $20,000 by December, a gain of about 2,000%. That was punctuated by five selloffs of at least 30%, including a fierce selloff in December that drove prices down 45% before the currency recovered by Friday to $14,292, according to CoinDesk, up 1,375% on the year.

Bitcoin’s...