Unlike 2021, the current year has turned out to be quite bad for cryptocurrencies. All the digital currencies shed most of their worth in the past 12 months.
The world’s most famous cryptocurrency Bitcoin that started this year on an upbeat note when it hovered around $46,208 dropped to $30,000 on May 10, and further to $18,958 on June 19.
Although bitcoin prices recovered to $22,400 on September 13, it now hovers around $16,840 on December 21, according to the CoinDesk prices. The highest level of this digital currency was hit on March 30 when it topped $47,456.
And one can imagine, bitcoin was no exception. All other cryptocurrencies faced the same fate. From ether to polka dot – all these decentralised currencies were in a free fall during 2022.
Ether: Just as bitcoin, Ether also lost big during 2022. When the year began, ethereum was trading at $3,677 per unit. It dropped to $2,442 towards the end of the same month on January 25, the CoinDesk prices show.
It recovered somewhat on April 5 when it bounced back to $3,520 but that was followed by a string of drops when ether started hitting new lows.
On June 19, it dropped below $1,000, again rose to $1,935 on August 15. It now hovers around $1,210 on December 21.
Polkadot: Just as other popular digital currencies, Polkadot also dropped big this year from $26.70 on January 1 to $4.52 on December 21, a massive fall of 83 percent.
The cryptocurrency had hit $30 on January 4 but dropped to $18 on January 23. It continued to fall and hit $8.30 on May 13, CoinDesk prices show.
In the second half of the year, polkadot's price remained in the single digit. It was trading around $7.29 on September 3 and $6 on November 11.
The overall market capitalisation of these cryptocurrencies has also dropped significantly in the past one year.
On January 1, 2022, the total market cap of cryptocurrencies was more than 2.24 trillion. It dropped to less than one trillion in the month of June when it hovered around $900 billion.
Although in July, it again bounced back, taking the market cap above 1 trillion, it again started declining afterwards and the market cap hovers around $810 billion on December 21, less than one-third of its peak of $ 3 trillion in November 2021.
In India also, the overall sentiment for cryptocurrencies stayed at an all-time low. During the budget 2022-23, the finance minister introduced tax of 30 percent on capital gains earned on crypto transactions and another one percent TDS on crypto transactions.
This gave a massive blow to investors’ interest, adversely impacting the volumes of crypto transactions across exchanges.
The next year, seemingly, is not expected to offer any good news for crypto investors.
“The markets are likely to go sideways till the second half of 2023. Volumes have definitely dropped, but it's way better in international exchanges. Indian exchanges are badly hit because of lack of regulations and stricter tax policies,” said Sidharth Sogani Jain - Founder and CEO, CREBACO.
Meanwhile, CoinSwitch released a year-end report on cryptocurrencies and behaviour of Indian investors towards the same. The report shows that Indian has 19 million crypto users out of which only 8 percent are women users.
During 2022, 45 percent of investors who love cryptos fall in the 18-25 years of age bracket. This is followed by 34% investors in the 26-35 years of age bracket.
The report also shows that the most popular cryptocurrency during 2022 was bitcoin and comprised 12.12 percent of crypto investments in India.
This was followed by dogecoin (11.54%), ethereum (9.43%), shiba Inu (6.92%), polygon (4.13%) and Cardano (3.47%) and ripple (2.57%).