- 2022: Bitcoin’s Worst Year Since 2022.
- Bitcoin Performs Poorly in 2022, worse than Stocks and Gold, for the first time since 2018.
- This is the worst year for cryptocurrency investors. Is there any hope for investment?
With the number of Bitcoin investors going down 70% in 2022, the yearly losses of Bitcoin are the same as those of well-known stocks like Meta and Tesla.
Stocks and Gold have performed poorly too. The year 2022 has been a tough year not only for crypto investors but also, mainly for stock market investors.
2022, Bitcoin’s Worst Year Since 2018
2022 is Bitcoin’s worst year since the 2018 crypto crash, as the cryptocurrency platform will end the year with a down of almost 70%.
The crypto’s underperformance can be attributed to factors like the United States Federal Reserve increasing interest rates to restrain growing inflationary pressures, followed by the downfall of several cryptocurrency firms like Celsius Networks, Three Arrows Capital, Terraform Labs, and FTX, among others.
Some firms had exposure to inoperative businesses, usually by stocking their native tokens. For example, a crypto-based investment company that Mike Novogratz founded, Galaxy Digital, confirmed a loss of $555 million in August because of holding Terra’s native token, LUNA, which has collapsed 99.99% year-to-date (YTD).
Tesla and Meta Suffer the Same Losses as Bitcoin in 2022
The previously named factors have caused Bitcoin to go down 60% YTD.
The U.S. benchmark S&P 500 has dropped almost 20% year-to-date to 3,183 points by Dec 28, its biggest fall since the 2018 economic crisis. The situation is even worse for Nasdaq Composite, which has dropped 35% YTD.
Most of the negatively affected well-known firms are Amazon. The firm has plunged roughly 50% YTD. Meta and Tesla are in the same boat as Amazon, as their stocks have crushed almost 65% and 72.75%, respectively. Accordingly, Bitcoin and tech stocks will have undergone the same losses in 2022.
Similar to Bitcoin, the Fed’s rate increase is still the most compelling reason behind the poor performance of the U.S. stock market. However, it remains to be seen whether a stricter monetary policy would bring about an economic recession in 2023.
This unpredictability has caused capital to move towards the U.S. dollar for safety, with the American Dollar Index (DXY) increasing closely by 8.5% YTD. The DXY is a barometer to measure the greenback’s health against the top foreign currencies.
Gold is No Longer a Place of Refuge
Spot gold has hiked 0.14% YTD to almost $1800 an ounce, making it the best performer compared to Bitcoin and the U.S. stock market.
However, 2022 has witnessed Gold dropping from its place of refuge characteristics before increasing U.S. bond yields and a stronger dollar.
For example, Gold has dropped 22% from its 2022 high of $2,070, but some losses have been associated with the dollar’s uptrend lost speed in 2022’s second half.
Closing Thoughts
Despite the downs discussed above, Bitcoin is still on top since March 2020.
The digital currency had added 1,650% after dropping in March 2020 to less than $4000, helped by the quantitative easing policy of the Fed.
As of today, Dec 28, 2022, investors that bought Bitcoin in March 2020 are with 332% profits.
Also, as of Dec 28, investors who purchased Nasdaq stocks during the easing era are currently sitting on a maximum profit of 56%.
