A Year to Forget for Bitcoin as Biggest Cryptocurrency Tumbles from Record High

This time last year, bitcoin was breaking records. In 2022, it came crashing back down to earth.

On Wednesday, bitcoin traded at $15,787.53, according to Dow Jones Market Data. That was down nearly 77% from its all-time end-of-day high, reached exactly one year earlier, of $67,802.30.

The slide was triggered in part by episodes such as the collapse of stablecoin TerraUSD in May, and the problems now unfolding at the crypto exchange FTX.

But it is also part of a broader trend of riskier, more speculative assets losing value as central banks raise interest rates, said Michael Hewson, chief market analyst at brokerage CMC Markets.

Technology stocks have also plunged, with the Nasdaq Composite Index down over 35% since its record close, which was also last November.

"People are de-risking as interest rates are going up and bitcoin is a classic example," said Mr. Hewson. "When interest rates are zero, you buy anything that moves, but when they're around 4%, you become a lot more discerning."

"When you get an exchange like FTX suddenly going to the wall, it makes people question this even more," he added. "What you're seeing is a flight of capital out to safer assets."

Bitcoin's absolute peak, on an intraday basis, actually came a day earlier. On Nov. 8, 2021 it hit $68,990.90, CoinDesk data shows.

The world's biggest cryptocurrency staged a modest rebound on Thursday morning in London, rising more than 4% to trade at about $16,509. It has previously endured several huge pullbacks in its history, only to recover to reach new highs.