OceanFirst Financial Corporation
01/10/2023 | Press release | Distributed by Public on 01/10/2023 12:02
Winter has arrived
January 10, 2023
One year ago, the cryptocurrency industry (Bitcoin, Ether, and similar digital currencies) were worth roughly $3 trillion, according to CNBC. One Bitcoin was worth $68,000. But when the Federal Reserve began raising interest rates to fight inflation, the value of cryptocurrencies began to fall. Bitcoin fell 19% in December 2021, and followed up with a 17% drop in January.
In January 2022, David Marcus tweeted: "It's during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens." That brought the phrase "crypto winter" into the lexicon.
The market for digital currencies went downhill from there. As interest rates continued to rise, more and more investors rotated out of their cryptocurrency investments, and values fell throughout the year. By November, the value of one Bitcoin had reached $18,000, a two-year low. CNBC estimated that the industry value had fallen by over $2 trillion. If that wasn't enough, in November the cryptocurrency exchange FTX went bankrupt, and some customer money went missing. Investigations are pending as of this writing.
Trust in digital currencies has taken a severe hit. The future of cryptocurrency probably includes government regulation, regulated exchanges, and greater protections for ordinary investors.