Year of Losing Bitcoin, Throughout 2022 Dropped 60%.
Bitcoin was monitored at $16,580 on Saturday (31/12). Throughout 2022, Bitcoin has sunk 64.18% from its position in the range of $46,000.
The fate of the largest crypto asset, Bitcoin, is far from the expectations of many throughout 2022. The crypto asset that was predicted to penetrate $100,000 is now only worth less than $20,000.
Based on Coinmarketcap data on Saturday (31/12/2022), Bitcoin was monitored at $16,580. So far this year, Bitcoin has sunk 64.18 percent from its position in the range of $46,000.
The fall in Bitcoin also dragged almost all other crypto assets or altcoins. Ethereum, the second largest crypto asset, has plunged 67.62%.
So far this year, Bitcoin has been weighed down by the Federal Reserve’s hawkish policies and a string of scandals and collapses of its once vaunted crypto projects. Even though it plunged more than 60 percent, this is not the worst annual performance Bitcoin has ever experienced.
Miller Tabak+Co chief analyst Matt Maley said people don’t understand how big cryptocurrencies are becoming an ‘easy money’ asset class in 2020 and 2021.
“Some cryptocurrencies will survive and even strengthen in the future, but they are moving too far, too fast after the Fed implemented its policy of zero interest rates and massive monetary easing,” said Maley as quoted by Bloomberg, Saturday (31/12/2022).
Now that these programs have disappeared, he continued, it will take longer for crypto assets to reach their full potential.
Fundstrat’s Tom Lee in late 2021 said that crypto assets could easily reach $100,000 in 2022 and could even reach the $200,000 range.
Meanwhile, in early January, Goldman Sachs analysts predicted Bitcoin could reach $100,000 in the next five years as it takes market share from gold. Pro-crypto asset investor Mike Novogratz also predicts Bitcoin reaching the $500,000 level in the same time frame.
However, many analysts early in the year misread how aggressively the Fed would raise interest rates to curb inflation. Other central banks around the world are also raising interest rates, creating a negative environment for risk assets like cryptocurrencies.
Crypto-related stocks are also sinking in 2022. Coinbase Global Inc. and Marathon Digital Holdings Inc. each slumping about 90 percent, Riot Blockchain Inc. fell 85 percent, and MicroStrategy Inc. subsidence 74 percent.
Senior analyst Arcane Vetle Lunde says 2020 and 2021 are zero interest rate policy parties, so that tends to give traction to risk assets like cryptos. But that turned around this year.
“In 2022, the party is over. Fortune does not favor the brave, and crypto enters a consistent cycle of doom, marred by defaults and fraud,” he said.
2022 brought successive blows to the crypto industry, from the collapse of the Terra blockchain that put a number of crypto lenders out of business, to the bankruptcy of FTX.
