A second "crypto winter" began in 2022, with high-profile businesses crumbling everywhere and the value of digital currencies plummeting dramatically. The year's events caught many investors off guard and made it more difficult to forecast the price of bitcoin.
The cryptocurrency market was flooded with analysts speculating fervently about where bitcoin might go next. They were frequently optimistic, although a handful predicted the Bitcoin will go below $20,000 per coin.
But in what has been a turbulent year for cryptocurrencies, with high-profile firm and project failures sending shockwaves across the sector, many market observers were taken off surprise.
The first sign of trouble came in May with the demise of terraUSD, also known as UST, an algorithmic stablecoin that was meant to be tied 1:1 to the US dollar. Due to its collapse, firms that had exposure to both cryptocurrencies were hurt as well as luna, the sister coin of terraUSD.
Due to its exposure to terraUSD, Three Arrows Capital, a hedge firm with strong views on cryptocurrencies, entered liquidation and filed for bankruptcy.
Then, in November, one of the biggest cryptocurrency exchanges in the world—FTX—which was headed by Sam Bankman-Fried, a prominent businessman, collapsed. The cryptocurrency sector is still feeling the effects of FTX.
Investors have had to deal with rising interest rates as well as failures specifically related to cryptocurrencies, which has put pressure on risk assets like equities and cryptocurrencies.
Since hitting an all-time high of about $69,000 in November 2021, Bitcoin has fallen by around 75%, and the market value of all cryptocurrencies as a whole has lost more than $2 trillion. Bitcoin was trading at just less than $17,000 on Friday.
CNBC contacted the individuals who made some of the riskiest price predictions for bitcoin in 2022, asking how they erred and whether the year's events had altered their perspective.
$250,000 for Tim Draper
At a tech conference in Amsterdam in 2018, Tim Draper forecasted that by the end of 2022, the price of one bitcoin will reach $250,000. The well-known Silicon Valley investor sang an onstage rap about bitcoin while sporting a purple tie with bitcoin emblems.
It is quite improbable that Draper's call will come to pass after four years. The founder of Draper Associates said earlier this month that $250,000 "is still my number" but that he is extending his projection by six months when asked about it.
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