It has been a rocky 12 months for bitcoin.
One year ago, bitcoin hit its all-time high of $68,789.
Today, it’s back below $20,000, having lost 70% over the last 12 months.
As bitcoin neared its record high last November, analysts attributed the rally in financial assets in part to investors who were attempting to hedge against inflation, with the rest coming as a result of rampant speculation, often by investors with little to no prior experience.
Read more: Bitcoin, Ether Hit New Record Highs
Less than three months after BTC’s momentary trip to the stratosphere, gravity started to rule the day — and trading — and by late January 2022, the most widely-held digital currency had quickly seen its valuation cut in half.
As PYMNTS reported Jan. 24, that drop was caused by the Federal Reserve’s news that it was pulling back stimulus to fight growing inflation, an announcement that pulled the rug out from under the broader stock market — as investors ran from all forms of risk — but especially from bitcoin and cryptocurrencies.
See more: Behind Bitcoin’s Collapse, Financial Fears Are Routing Faith in Crypto
In time, other problems and potholes would emerge.
By mid-February, Ethereum Founder Vitalik Buterin told Bloomberg that the digital asset universe could see some benefits from the falling coin prices, noting that some crypto investors would even “welcome a bear market,” as it would allow them to see which crypto-related projects were resilient versus those that were more of a gimmick.
Read more: Ethereum Founder Explains ‘Crypto Winter’ Upside
To be sure, it has not been all down days for bitcoin over the past year, as there have been too many rallies and retreats to remember, but in each instance, each comeback was met with subsequent selling, lower-lows, and sagging sentiment.
By May, PYMNTS reported that most of the 100 biggest cryptocurrencies were all down in sync with bitcoin, casting doubts over the entire asset class.
See more: Downward Spiral Points to Bigger Problem for Cryptos
In the five months since, bitcoin has never gotten above $25,000 and has dipped below the $20,000 level on several occasions.
This led PYMNTS to report Oct. 20 that, for active bitcoin traders, the cryptocurrency’s biggest problem now is its current lack of volatility. With bitcoin relatively flat since June, retail buyers and sellers who had previously been drawn to those extreme moves, have begun to seek opportunities elsewhere.
Read more: Are Retail Traders Bored Now That Bitcoin is Less Volatile?
All the while, a swirl of regulatory scrutiny in the United States and abroad has clouded the category, although in recent weeks, a spate of custodial agreements that enable large investors to purchase and park bitcoin in their accounts suggests that a new round of sophistication may be entering the market.
While the one-year look back on bitcoin seems awful, who’s to say where it will be and how it will be used a year from now and beyond? The business of bitcoin, and the many use cases that come with it, are starting to get a fresh look.
For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More