Recent reports disclose that the leading digital crypto asset Bitcoin lost more than 60% in 2022.
The report revealed that this is the second-worst annual performance on record for Bitcoin, and only its third down year ever.
The digital asset which once reached an all-time high of $68,789 in November 2021, has seen its price massively decline, as it is currently trading at $16,721. In the first month of 2022, Bitcoin started on a positive note, which saw it nearly twice as valuable as it was in January 2021.
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This was followed by several predictions from analysts stating that the crypto asset could hit $100,000 or more before the end of 2022.
Unfortunately, it was short-lived as before the end of the first month of 2022, it lost nearly all the previous yearly gains, dropping to $33,000.
However, some factors were responsible for the massive decline in crypto prices, as one major factor is the implosion of crypto exchange platform FTX, which filed for chapter 11 bankruptcy on November 11, as well as core scientific, one the largest publicly traded crypto mining companies, which filed for bankruptcy on December 21.
Bitcoin’s price already went far lower than it was at the start of the year, which saw it take another downturn, dropping by over 25% in less than a week. This solidified 2022 as one of the worst years crypto had ever seen.
All of these shattered investors’ confidence as the ripple effects of the company’s collapse continued to spread throughout the crypto industry.
According to James Royal, a principal reporter at Bankrate, he disclosed that “many Americans are coming to realize that cryptocurrency is just a speculative mania and the industry is rife with crooks.”
To that point, about 60% of Americans now believe investing in digital currency is highly risky, up from 45% in 2021. Overall, the crypto market has lost a little over $2 trillion in 2022 and popular digital coins such as bitcoin and Ethereum have fallen far below their 2021 highs.
Also, the US Federal Reserve increased interest rates (as was the case in many countries worldwide), which was catastrophic for both the traditional and crypto markets.
2022’s recurring interest rate hikes pushed investors to opt for saver options as an alternative to cryptocurrencies.
As a result, the demand for cryptos took a sharp downturn, and prices soon followed. This affected just about every cryptocurrency in the market, fueling a further price drop.
While it is currently trading at an all-time low of $16,800, more than 60% down year-to-date (YTD) questions surrounding the cryptocurrency’s future continue to arise. Some investors are positive that the prices of cryptocurrency will surge, while several others feel this might be the end of crypto.