It’s been a brutal year for the cryptocurrency market.
In the latest blow to the crypto space, Core Scientific, one of the largest publicly traded crypto mining companies in the U.S, which primarily mints bitcoin, filed for bankruptcy on Dec. 21, citing falling crypto prices and rising energy costs.
And the implosion of FTX, a now-bankrupt crypto trading platform that was once valued at $32 billion, has shattered investors’ confidence as the ripple effects of the company’s collapse continue to spread throughout the crypto industry.
“Many Americans are coming to realize that cryptocurrency is just a speculative mania and the industry is rife with crooks,” James Royal, principal reporter at Bankrate, tells CNBC Make It.
To that point, about 60% of Americans now believe investing in digital currency is highly risky — up from 45% in 2021, according to the recent CNBC Make It: Your Money survey, conducted in partnership with Momentive. Another 26% believe it is moderately risky.
Just 8% of Americans have a positive view of cryptocurrency as of Nov. 2022, according to the CNBC All-America Economic Survey.
Overall, the crypto market has lost a little over $2 trillion in 2022 and popular digital coins such as bitcoin have fallen far below their 2021 highs.
Here’s how much the value of seven popular cryptocurrencies changed in 2022 as of Dec. 22, per CNBC’s calculations.
- Terra: -100%
- Solana: -93%
- AMP: -93%
- Cardano: -80%
- Ether: -67%
- Bitcoin: -63%
- Dogecoin: -55%
Prices are likely to fall further when “traders and crypto companies begin to see that they don’t have an unending stream of marks willing to prop up crypto prices,” Royal says.
In fact, Royal warns against investing in crypto at all.
Crypto is considered to be a highly volatile asset that is subject to unpredictable price fluctuations and falls. For this reason, financial experts typically advise against investing more into crypto than you’re willing to potentially lose.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don’t miss: Mark Cuban still believes in crypto despite FTX collapse—here’s why