Crypto meltdown shreds bitcoin hype

A year ago, crypto analysts, fueled by the successes of 2021, had high hopes for Bitcoin, with some of them seeing the token hit $100,000 or more in 2022.

That’s a far cry from where this Annus Horribilis’ coin actually ends up: $16,500.

Bitcoin, weighed down by an overly hawkish Federal Reserve and a string of scandals and implosions of the crypto space’s once-vaunted projects, shed more than 60 percent in 2022, its second-worst annual performance on record and only its third-last year decline ever.

In what has been a horror year for Bitcoin, the value of the cryptocurrency has plummeted.

In what has been a horror year for Bitcoin, the value of the cryptocurrency has plummeted.Credit:Bloomberg

Other cryptocurrencies also suffered, with ether losing almost 70 percent and an index of the 100 largest coins falling about 65 percent.

“People didn’t understand how much of an ‘easy money’ asset class cryptocurrency was in 2020 and 2021,” said Matt Maley, chief market strategist at Miller Tabak + Co.

ARK Investment Fund's Cathie Wood is a notable supporter of Bitcoin.

ARK Investment Fund’s Cathie Wood is a notable supporter of Bitcoin. Credit:Bloomberg

“Some cryptos will survive and even thrive going forward, but they have moved way too far and way too fast after the Fed implemented its zero interest rate and massive QE policy. Now that these programs are gone, it will take much longer for the crypto asset class to reach its full potential.”

Fundstrat’s Tom Lee said in late 2021 that Bitcoin could easily reach $100,000 in 2022 and that the $200,000 range is within reach. “I know it sounds fantastic, but it’s very useful,” he told an interviewer.

Meanwhile, strategists at Goldman Sachs predicted in early January that Bitcoin could hit $100,000 over five years as it takes market share from gold. Crypto advocate Mike Novogratz had called for the token to hit $500,000 in the same period, a forecast he then dropped in early December.

https://www.smh.com.au/business/markets/trust-no-one-crypto-meltdown-shreds-bitcoin-hype-20230101-p5c9pf.html?ref=rss&utm_medium=rss&utm_source=rss_business Crypto meltdown shreds bitcoin hype

Brian Lowry

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