Cryptocurrencies at crossroads after annus horribilis

To paraphrase Queen Elizabeth of the United Kingdom, the bitcoin industry won't look back on 2022 with pure joy.

Investors began to pose major existential issues at the end of the year as a result of the rapid series of crashes, contagion, and breakdowns.

After all, the biggest cryptocurrency, bitcoin, has struggled to maintain its value for more than a week at a time and has dropped by almost 75 percent from its high of $69,000 in November of last year.

Many of the 22,000 or so tokens and coins are comatose, if not dead, and their market value is now less than a third of their high $3 trillion worth in November 2021.

That came as a harsh reality check for an industry that began 2022 with hopes for widespread institutional adoption, the replacement of gold as the primary inflation hedge by bitcoin, endorsements from people like Tesla Inc. CEO Elon Musk, and the frenzied celebration of non-fungible tokens valued at billions of dollars.

The Fed's extreme hawkishness didn't only hit cryptocurrencies hard; TerraUSD's collapse, a stablecoin, also caused a "Lehman moment" when funds and brokers like Celsius and Voyager went bankrupt.

The collapse of Sam Bankman-FTX Fried's exchange last month, which some saw as the death knell for cryptocurrencies, was one such event.