‘Trust no one’: Crypto meltdown shreds bitcoin hype

A year ago, crypto analysts, riding high from the successes of 2021, had big hopes for bitcoin, with some of them seeing the token hitting $US100,000 or more in 2022.

That’s a far reach from where the coin is actually ending this annus horribilis: $16,500.

Bitcoin, weighed down by an uber-hawkish Federal Reserve and a string of scandals and implosions of the crypto space’s once-vaunted projects, lost more than 60 per cent in 2022, its second-worst annual performance on record, and only its third down year ever.

Other cryptocurrencies also suffered, with ether losing near 70 per cent, and an index of the 100 largest coins dropping roughly 65 per cent.

“People did not understand how much of an ‘easy money’ asset class cryptocurrencies were in 2020 and 2021,” said Matt Maley, chief market strategist for Miller Tabak + Co.

“Some cryptos will survive and even thrive in the future, but they moved way too far, way too fast after the Fed engaged in their zero interest rate and massive QE policies. Now that these programs have disappeared, it’s going to take a lot longer for the crypto asset class to reach its full potential.”

Fundstrat’s Tom Lee at the end of 2021 said bitcoin could easily reach $US100,000 in 2022 and that the $US200,000 range was achievable. “I know it sounds fantastical, but it’s very useful,” he told an interviewer.

Meanwhile, at the start of January, Goldman Sachs strategists predicted that bitcoin could reach $US100,000 over five years as it took market share from gold. Crypto advocate Mike Novogratz had called for the token to reach $US500,000 in the same time frame, a projection he then dropped at the beginning of December.