In 2022, the cryptocurrency market experienced one of its most severe crashes ever, widely known as the “Crypto Winter.” Bitcoin (BTC), which had reached an all-time high above $69,000 in November 2021, plunged to below $17,000 by the end of 2022, losing over 75% of its value. Ethereum also fell from its peak of around $4,800 to approximately $1,200.

The collapse was triggered by multiple factors:

• Rising interest rates by the U.S. Federal Reserve and tight monetary policies to combat inflation
• The dramatic collapse of FTX exchange in November 2022, causing over $8 billion in losses for users
• Bankruptcy of major companies such as Celsius Network and Three Arrows Capital
• Loss of investor confidence and massive capital outflows from the market

As a result, the total crypto market capitalization dropped from over $3 trillion at its 2021 peak to under $800 billion by late 2022. Millions of retail and institutional investors suffered heavy losses, and numerous projects were shut down.