In 2022, the cryptocurrency industry is in rough shape, with cryptocurrency prices crashing and a series of catastrophic bankruptcies.
Since January last year, the global cryptocurrency market capitalization has fallen by nearly 65%. $2.2 trillion To $803 billion, according to CoinMarketCap.used to be near peak 3 trillion dollars of November 2021.
Chad HarrisChief Commercial Officer riot blockchainbuilding a cryptocurrency mining facility in Corsicana, Texassensed a shift in industry sentiment this year, he said at the recent Texas Blockchain Summit.
“Two years ago this audience was packed,” he told attendees in November. I believe it’s important because every time one of us fails in a disastrous way, it affects all of us in this room.”
The troubled year saw cryptocurrencies Luna and Terra fail, as well as major crypto lenders Voyager and Celsius Network failing in July. In November, he had two more big names bite the dust as his crypto platform FTX filed for bankruptcy and his crypto lender BlockFi followed suit.
The latest installment in the series of disasters has arrived December 21st when AustinA cryptocurrency mining company based in core scientific Less than a year after going public in January last year, the company filed for Chapter 11 due to rising electricity prices and falling bitcoin prices.
So what does all this mean for states that have openly embraced cryptocurrency companies?
“While we have feelings of disappointment with FTX, we are resolved and optimistic about the future of the industry.” Texas Blockchain Council president Lee Bracher Summit said. “We’re rolling up our sleeves and moving forward.”
In September, crypto mining data center operator Compute North texashas filed for bankruptcy protection.The struggling company sold the company big spring Transferred to Foundry Digital in November.
Compute North was the state’s only notable cryptocurrency bankruptcy this year. texas According to Bratcher, crypto miners have had to scale back operations to cope with the economic downturn.
“I can’t name them, but there are a few,” he said. “Most are fully open.”
Texas Blockchain Council Leaders predict that funding for cryptocurrency projects has dried up significantly and will continue until 2023. If the current situation of falling cryptocurrency prices and rising energy costs continues, the One or two more bankruptcies are likely.
“But we are bullish about the future,” he said. “I think the worst is behind us.”
Jackie Sawickya self-proclaimed environmentalist protesting riot blockchain new north texas She believes the worst is yet to come for the industry.
“This is more than just a bubble,” she said. “It’s collapsing. It’s a dying industry. The problem is that a lot of these things can’t be put back together. There are real world consequences for the people who invested in these companies.”
A senior economist at Oxford Economics said the maximum cryptocurrency valuation is meaningless for assets that “have not yet established a real economic use”. Tamara Basic Vasiliev in a recent report.bitcoin is traded on $16,720 It’s down 65% this year.
“The cryptocurrency market is plagued by accusations that it is a super-massive Ponzi scheme. It will be difficult,” Vasiliev wrote.
Sawicky said cryptocurrency companies are designed to consume resources such as electricity, but do not produce useful products.
Wes CumminsCEO of Applied Digital Dallassaid it had been a tough year for tech companies as a whole. Facebook’s stock is down 66% this year, Amazon is down 50% of his, and Google is down about 40%.
“We’re cleaning up the pump and the fraud,” Cummins said.
Going forward, Bitcoin will likely become even more dominant in the cryptocurrency market, and smaller coins like Luna will decline, Cummins said. Pricing site CoinGecko has found that about 40% of the more than 8,000 cryptocurrencies listed on the site in 2021 will be deactivated or delisted, making them “dead coins.”
This means consumers are likely to turn to platforms that offer better consumer protection.
“People who got burned in FTX may be over,” Cummins said. “But many will continue to be involved.”
