The carnage of recent weeks in the bitcoin market, which has reached its lowest value since the 2022 collapse, has already vaporized more than a trillion dollars. What’s really going on with the queen of cryptocurrencies? And what happened in 2022?
After several weeks of decline, Bitcoin fell again this Friday to the $80,760, before recovering above $85,000 — only to slide back down. At the time of this publication, it is listed at US$83,698.
Cryptocurrency has been going through truly difficult times: it lost 14% this week alone, fell 23.5% in the last month, and depreciated 34%since reaching an all-time high, above $126,000, on October 6th.
As note, you are on your way to registering the worst month since the collapse of cryptocurrencies in 2022. But what happens after all with the queen of cryptocurrencies? AND what happened in 2022?
The popular cryptocurrency went through a collapse this year when the crypto empire of Sam Bankman-FriedFTX, if , remembers the .
Bankman-Fried used customer deposits at his cryptocurrency exchange to cover losses in another company of yoursAlameda Research. But the real reason for the collapse was the fact that the investor was manipulating what was in practice fictitious money created by himself.
In 2019, the CEO of Binance, Changpeng Zhaohad purchased a 20% stake in FTX. When Bankman-Fried and Zhao fell out in 2021, FTX CEO bought back the shares with a self-created tokenthe FTT — for a value of 2 billion dollars in… FTTs.
Em 2022, Zhao decides to sell your FTT, knowing they had no real value. That was the first domino to fallin which he would reveal himself to Bankman-Fried, and which would lead to his conviction to .
Bankman-Fried cometeu many other illegal actsbut would probably have continued impunity for yearshad Zhao not decided, in practice, to pull the rug out from under him — knowing that this would destroy his competitor’s empire.
Moral of the story: when you build a business based on fictitious moneyit becomes very vulnerable to any shock. And there are even those who say, like Bill Gates, that cryptocurrencies are “”.
Bankman-Fried is still currently in prison, while Zhao, who served five months in an unrelated case for violating anti-money laundering laws, has since been pardoned by Donald Trump.
However, as we read these last few paragraphs, it is likely that bitcoin continued its it’s dizzyingafter having closed another week in the red. What can, this time, explain his downfall?
According to analysts interviewed by , concerns surrounding a possible Artificial Intelligence bubble may end up resulting in turmoil for cryptocurrenciessince technological stocks tend to evolve in line with bitcoin.
“When technology sneezesit is natural to expect Bitcoin to catch a cold”, says the investment analyst Nic Puckrin. In addition to moving away from higher risk assets, some investors may also be selling bitcoin to make profits from their investments.
But in fact, no one can explain it very well the reason why bitcoin interrupted its brilliant gallop and is now dragging itself towards an apparent precipice.
In total, note the , the reference cryptocurrency depreciated 33% in the face of all-time high above $126,000just a month and a half ago. In recent weeks, the carnage has vaporized more than a billion dollars of the crypto market. You read that right: a billion dollars, not a billion…
These will be the first signs of a real collapse? Nobody knows. But one thing is certain: predictions that bitcoin would reach $200,000 by the end of the year they seem a little goofy now.
