The 2022 bear market caused billions of dollars in net worth losses for several of the richest cryptocurrency entrepreneurs. From seven in 2021 to four this year, the number of crypto millionaires on The Forbes 400 list (US) has decreased. Their combined fortune decreased equally, from $55.1 billion to $27.3 billion, according to Forbes.
For blockchain supporters, builders, and HODLers, it has been a harsh crypto winter. According to data from CoinMarketCap, the market value of all cryptocurrencies decreased by halves, from roughly $2.2 trillion to under $1 trillion.
Last year, as Bitcoin reached a high of $69,000 in November and money flowed into NFTs and “Web3” projects, the value of crypto assets and public acceptance of them both reached new heights. Crypto was expected to have a big year in 2022, but instead, the market has tanked.
The market has been shaken by the failure of well-known cryptocurrency initiatives, including stablecoin Terra, the hedge fund Three Arrows Capital, and lenders Celsius Network and Voyager Digital. Investor gust has been reduced by fear, which has been exacerbated by inflation, rising interest rates, and a wider market selloff.
There are a number of non-US cryptocurrency billionaires who aren’t on Forbes’ 400 rich list. The market slump has cost founders of companies like Binance’s Changpeng Zhao, Fortress Investment Group’s Mike Novogratz, and others billions of dollars.
Bear markets, however, are a common occurrence in the world of digital markets and they have always emerged stronger than before. Therefore, it is not unexpected that crypto enthusiasts believe the current circumstances are merely transitory and that things will improve soon.
The correlation between the equities markets and bitcoin has increased. Some argue that there is a close link between the S&P 500 index and Bitcoin (BTC), while some IMF economists assert that in some parts of the world, there is a 10-fold increase in the correlation between cryptocurrency and stock markets.
The creator of Ethereum, Vitalik Buterin, has previously said he would welcome reduced cryptocurrency prices. “The people who are deep into crypto, and especially building stuff, a lot of them prefer a down market,” he told a news publishing house in February. When he claimed in May that he was no longer a billionaire, the co-founder of Ethereum spoke for many cryptocurrency’s super-rich.
A prominent ecosystem of widely used applications typically takes years to develop after a big infrastructure-level technology breakthrough like cryptocurrency, according to Fred Ehrsam, co-founder and board member of Coinbase.