Following the drubbing of the crypto markets in June 2022, with Bitcoin and Ethereum prices down nearly 75 percent and 82 percent, respectively, from their all-time highs, many market observers predicted the early death of the crypto industry. Crypto detractors, including regulators and vested interests in the legacy financial system, each used the rout as evidence that crypto is a dangerous scam that needs to be more heavily regulated, if not completely outlawed. The predictions of imminent doom were premature. Bitcoin is up 37 percent and the price of Ether has doubled since the June lows. Prices will go up and prices will go down. Volatility will persist. This isn’t the point.
While highly correlated with the simultaneous decline and recovery of the equity markets, the crypto market had some notable frauds and failures in the quarter among previously large crypto funds and lenders that caused a domino effect across the industry, much like the collateral damage caused by the collapse of large hedge funds or banks in traditional financial markets.
