2022 was the year of the cryptocurrency crash

2022 was the year of destabilization of crypto-currencies, which have now largely lost not only their value but also their credibility.

Bitcoin,blockchain,crypto,coin,cryptocurrency

In 2022, serious and multiple events caused the entire crypto-currency bubble to burst unceremoniously. The king of digital currencies, Bitcoin lost more than 2022% of its value in 60.

In addition, it crashed FTX exchange, the cryptocurrency bank Celsius went bankrupt and the Terra Luna digital currency is now a thing of the past. Millions of customers are pulling their hair out as they lost billions of euros.

BlockFi, another major crypto exchange, filed for bankruptcy a few weeks ago. Other crypto entities, including major lenders like Genesis Global Trading, are simply trying to stay afloat and avoid their own bankruptcies.

The decline is not due to sudden investor indifference. Bitcoin and all other cryptocurrencies were mainly affected by the fact that more and more central banks were forced to take full action against the escalating inflation, most notably the US Fed.

bitcoin

2022 was one of the worst years for the entire financial system. According to Bloomberg, US stocks ended 2022 as the worst year in more than a decade for global stocks and bonds.

It wasn't just the war in Ukraine and the energy crisis. Signs of a bad year have been there since 2021 when in the fourth quarter of 2021 Fed Chairman Jerome Powell had announced that the era of cheap money would soon end. Just for Powell to think this, it caused the financial markets to freeze.

On the other hand, there are voices within the cryptocurrency system that believe that Bitcoin will reach $100.000, but without specifying when this will happen. The most down-to-earth predictions speak for 2023 of an exchange rate between 10.000 and 28.000 dollars.

One thing is for sure. The price of Bitcoin is extremely difficult to predict and is even more susceptible to market forces than more established asset classes. After all, cryptocurrencies are nothing more than a dream, a different concept of an investment opportunity and a new way of looking at money.

They were established as "democratic" currencies to be managed and owned only by its users. The state or banks will not be able to control them and thus they would delineate an independent, unbound society.

The result was that thousands of illegal transactions pass through Bitcoin and other digital currencies, not that legal banks do not provide corresponding opportunities for the hidden circulation of normal money. But with Bitcoin even the most unhinged can handle transactions without the risk of the police or the IRS hanging over their heads.

Cryptocurrencies will not cease to exist. Whether for illicit use, or for the romantics of a revolutionary society, they will now always be here to meet specific needs, but they will never replace regular money. The nature of capitalism does not change with cryptocurrencies.

And because regular money is based on the production of goods and their circulation, it will always be the regulator. The markets based on this will first of all take care of their system and if they see the opportunity they will give space to Bitcoin for another bubble that will enrich the smart and impoverish the naive.

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Bitcoin,blockchain,crypto,coin,cryptocurrency

Written by Dimitris

Dimitris hates on Mondays .....

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