Crypto Collapse: It’s Looking Like a Long, Cold, Contagious Winter

A coin is set on fire to reveal a digital wireframe underneath.
Illustration by Alex Castro / The Verge

FTX is just the latest company to face an uncertain future as the value of cryptocurrency plummets, revealing flaws in high-risk financial strategies that fueled the recent crypto and NFT boom.

On January 1, 2022, one Bitcoin would cost you about $46,000. On November 8, that same coin went for about $18,500. And then the most dramatic crypto story of the year had only just begun: the ongoing collapse of the FTX exchange, bringing yet another round of existential threats to the crypto industry as a whole.

This year seemed like death by a thousand scandals for crypto. There was the Luna/Terra crash, which wiped out billions in value practically overnight. There was Axie Infinity, the once-popular NFT game that lost $625 million to a hack and has struggled to recover. Celsius collapsed. Three Arrows Capital collapsed. Remember when NFTs were cool and people thought their JPGs were worth millions?

All of this happened, of course, as the overall economy started to level again after a pandemic-induced spike in stock prices — which also tempered society’s overall tolerance for chaotic, nonsensical Internet money gambling. As the economy started to level off and our collective risk tolerance waned, crypto went from being a fun toy to a dangerous bet for many investors.

Crypto has crashed before, and as always the HODLers say there is another upside to come. But right now, the future for all types of cryptocurrencies looks pretty bleak.

Here’s all our coverage of the ongoing crypto winter: