The cryptocurrency market peaked a year ago, and since then investors around the world have lost $2 trillion U.S. on digital coins and tokens, according to industry data.
In November 2021, the price of Bitcoin (BTC) peaked at $68,000 U.S. Earlier this week, Bitcoin was trading near $16,000 U.S.
The entire crypto industry, valued at $3 trillion U.S. 12 months ago, now sits at $900 billion U.S., according to data from multiple cryptocurrency websites, including Coinbase (COIN).
Rather than acting as a hedge against inflation, which remains near a 40-year high in the U.S., Bitcoin and other digital assets have proven to be a speculative asset that critics say formed a bubble that is now popping.
The near collapse this week of crypto exchange FTX is the latest in a series of implosions at cryptocurrency firms that began this past summer when stablecoin Terra USD (UST) lost its peg to the U.S. dollar and crypto lender Celsius and crypto hedge fund Three Arrows Capital each filed for bankruptcy.
Crypto stocks continue to plunge as confidence in the entire industry has been shaken. Coinbase’s share price fell 20% over two days this week, while shares of Robinhood (HOOD) have plunged 30%.
Last week, Coinbase reported that its revenue declined more than 50% in the third quarter from a year earlier, and a net loss of $545 million U.S.
Analysts and investors are referring to the current moment as a “crypto winter” and expect it to continue in the months ahead.
Bitcoin’s price is down 64% this year at just over $17,000 U.S.
