At the time of writing, both currencies were down by over 60 percent from their respectives highs last year. And it's not just the tale of these two cryptos alone, other tokens like Dogecoin, Avalanche, and Solana also plunged heavily. The market cap for cryptocurrencies has fallen to $810 billion from $2.18 trillion a year ago.
HOW CRYPTOS GOT THERE
Industry experts blame it on factors like rising inflation, interest rates and economic uncertainty that drove investors to sell risk assets throughout the year. Other factors included the fall of well-known crypto projects including Terra LUNA and Celsius. In November, the crypto market felt another jolt when FTX exchange announced bankruptcy and Samuel Bankman-Fried, aka SBF resigned from his position as CEO of FTX. The fiasco saw Bitcoin price dropping from over $20,000 to under $16,000 in a matter of days, Ethereum also saw a similar decline, falling from above $1,600 to below $1,200 as the events unfolded.
The FTX fiasco affected investors across the globe. In India too, an estimated 3-5 lakh Indians lost their money owing to their exposure in FTX exchange. "This year will be etched in the memory of the Crypto users for a long time for the series of unprecedented events that shattered investor confidence, caused many long-time believers to question the principles, and affected users adversely. Centralized exchanges have been one of the leading platforms for buying and selling Crypto. The FTX crash might have users question the credibility of exchanges as it was one of the biggest platforms enabling Crypto purchase," says Rajagopal Menon, Vice President, WazirX.
EFFORTS BY INDIAN EXCHANGES FOR INVESTORS' PROTECTION
This story is from the January 2023 edition of Entrepreneur magazine.
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This story is from the January 2023 edition of Entrepreneur magazine.
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