Cryptoverse: Bitcoin Took A Beating In 2022

ndtv.com:

Surging inflation led to investors fleeing higher-risk assets - tech stocks and cryptocurrencies.(File)

Bitcoin staggered into 2022. It ends the year slumped in an alleyway, robbed of its cocktail of cheap money and leveraged bets, shunned by the establishment.

The pre-eminent cryptocurrency has lost 60% of its value, while the wider crypto market has shrunk by $1.4 trillion, squashed by rising interest rates, vanishing risk appetite and corporate collapses including Sam Bankman-Fried's FTX.

Crypto funds have seen net inflows of $498 million in 2022, versus $9.1 billion in 2021, according to data from digital asset manager CoinShares, reflecting how mainstream finance has steered clear of the market through its annus horribilis.

James Malcolm, head of FX strategy at UBS, said that in the first half of the year he had spent 70% of his time with clients talking crypto. By contrast, during 10 days in North America last month, from Montreal to Miami, "I spent less than 2% of my time discussing crypto".

Even last year, before the decline began in November, cryptocurrencies were realistically seen as two or three years away from winning acceptance from mainstream institutional investors, Malcolm added.

"Now it's completely in the far, distant future."

CRYPTO OPTIMIST FOR 2023?

It hasn't been all bad for crypto, though: 2022 was also the year the Ethereum blockchain finally pulled off its "Merge" mega-upgrade, which moved it to a less energy-intensive "proof of stake" system in September.

"This event was a technological feat and one of the lone positive events in a year that otherwise has been rather dark for crypto," said Anthony Georgiades, co-founder of the Pastel Network blockchain.

"These upgrades will make the Ethereum ecosystem