The collapse of cryptocurrency exchange FTX following the arrest of former cryptocurrency golden boy founder Sam Bankman-Fried made matters worse.
New Delhi,Has been updated: December 14, 2022 19:16 IST
Cryptocurrencies Fall Over 60% in 2022 (Representative)
Dip Lai: As 2022 draws to a close, crypto traders around the world are facing difficult times. The collapse of cryptocurrency exchange FTX following the arrest of once-cryptocurrency golden boy founder Sam Bankman-Fried only made things worse. Years of deception,” he said, covering up diverting client funds from FTX investors to his cryptocurrency trading hedge fund.
- Cryptocurrencies are down more than 60% in 2022 amid global fraud and regulatory uncertainty.
- Major cryptocurrency exchange FTX and its American branch, FTX.US, filed for bankruptcy in November. Bankman-Fried says he will be arrested in the Bahamas on December 12 and extradited to the US
- Bankman-Fried may have reportedly illegally received about $10 billion from FTX client funds for his trading firm, Alameda Research.
- The impact of FTX could hit dozens of cryptocurrency companies and open many regulatory and criminal investigation options.
- Following the bankruptcy of FTX and the arrest of Bankman-Fried, the major cryptocurrency platform is witnessing a massive outflow of funds.
- Miners are defaulting on machine-backed loans as low Bitcoin prices and rising energy costs hit them.
Despite these bleak developments, some financial moguls hope cryptocurrencies will become the next generation of markets. BlackRock CEO Larry Fink recently said, “We believe the next generation of markets, the next generation of securities, will be the tokenization of securities.
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Important reasons:
The supposed future of cryptocurrencies feels uncertain as the volatility of the cryptocurrency market increases and investors continue to dump riskier assets.
By numbers:
After the 2021 bull market, cryptocurrencies saw a correction in the first month of 2022 as Bitcoin (BTC) and Ether (ETH) fell about 20% and 31% respectively. Cryptocurrency prices are plummeting right now, with Bitcoin hovering around $17,000, and since early 2022 he’s down more than 60%.
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However, there was a slight recovery in October compared to September, with an increase of around 1.76%, the first rise since July, but still below the March peak.
Standard Chartered Bank has pointed out that the price of Bitcoin could fall to $5,000 next year. “Yields have plummeted along with tech stocks, and while bitcoin sales have slowed, the damage has been done,” said Eric Robertsen, global head of research at Standard Chartered Bank. Currency companies and exchanges have found themselves lacking liquidity, leading to further bankruptcies and the collapse of investor confidence in digital assets.
Bitcoin is the crypto market indicator with the largest market capitalization, and the rest of the cryptocurrencies tend to follow its path. As a result, despite high trade volatility, some experts expect that cryptocurrencies will likely make a comeback in 2023.
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