In this article, we discuss the 10 cryptocurrencies that performed poorly during the crypto crash of 2022. If you want to skip our detailed analysis of the crypto market heading into 2022, go directly to Crypto Crash 2022: Top 5 Losers in January.
In January 2022, Bitcoin, Ethereum, and all major cryptocurrencies dropped by 10% or more, and on January 21, the cryptocurrency market cap declined by $205 billion within a span of 24 hours. The major market indices also crashed, and were treading the correction territory at the period too.dhaka
Peter Johnson, Jump Crypto Partner and DeFi Alliance Founding Partner, joined CNBC on January 8 and stated that Bitcoin is because is perceived as a risk asset currently, and investors are getting into the futures market, which requires liquidation of assets. However, he believes that there are positive catalysts for crypto in 2022. He noted that the macro inflationary backdrop is a good sign for Bitcoin, and the billions of dollars worth of capital that is ready to be deployed into crypto hedge funds will also enable positive movement in the crypto space. He also stated that with world-class talent being poured into crypto, the market will definitely rebound soon.
Paul Krugman, a Nobel Prize-winning economist, has warned investors about the growing volatility of the cryptocurrency market, and found it comparable to the subprime mortgage crisis of 2007. He believes that investors gave into the crypto hype of 2021, without truly understanding the risks at stake, and put their money into assets which are speculative at best. Krugman is a vocal crypto bear, and he has been known to describe cryptocurrency as a new-age Ponzi scheme. Data on January 28 suggested that the crypto market is worth $1.7 trillion, down from its all-time high of $3 trillion.
Like all other sectors and markets, the crypto crash of 2022 is associated with the uncertainty brought forward by new COVID-19 variants, and it is unknown for now whether most retail crypto investors lean towards buying the dip or cutting their losses and selling out.