Bitcoin’s 60% year-to-date correction looks bad, but many stocks have dropped by even more cryptomarketbag Altcoin update

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The 60% and 66% drop in Bitcoin (BTC) and Ether (ETH) prices is receiving a lot of criticism from cryptocurrency critics and perhaps deserves it, but there are also plenty of stocks with similar, if not underperforming.

The sharp volatility seen in crypto prices is partly driven by the bankruptcy of major centralized yield and lending platforms, the bankruptcy of Three Arrows Capital, and liquidity issues faced by a handful of exchanges and mining pools.

For cryptocurrencies, 2022 has certainly not been a good year, and even Tesla sold 75% of its bitcoin holdings at a loss in Q2. The half-trillion dollar company still holds a $218 million position, but the news certainly didn’t help investor sentiment regarding corporate adoption of bitcoin.

Cryptocurrencies are not the only assets to be affected by the withdrawal of stimulus measures by central banks and a hike in interest rates. A handful of multi-billion dollar companies around the world have also suffered, surpassing 85% in 2022 alone.

Cash-hungry companies see their share price fall sharply

Unlike cryptocurrencies, companies, especially those listed on stock exchanges, rely on financing – whether the cash is used for mergers and acquisitions or day-to-day operations. This is why interest rates set by central banks dramatically affect debt-intensive sectors such as energy, auto sales and technology.

SAPAM (SPM.MI), an Italy-based oil and gas engineering and exploration services provider for offshore and onshore projects, saw its shares fall 99.4% in 2022. The company had suffered serious losses of more than a third of its equity. 2021 and was in dire need of cash to sustain it as capital costs rose as interest rates rose.

Uniper (UN01.DE), a German energy company with more than 10,000 employees, suffered serious losses after suspending its Nord Stream 2 gas pipeline project in July 2022, saving 15 billion euros. However, as energy prices continued to rise, Uniper could not fulfill its contracts and was nationalized by the German government in September 2022. The result was a 91.7% drop in the stock, well below its $14.5 billion valuation.

Cazoo Group Ltd (CZOO) currently has a market capitalization of $466 million, but the car retailer was valued at $4.55 billion by the end of 2021, a 90% loss. Nevertheless, the United Kingdom-based company offered a way to trade and rent automobiles online during the restrictions imposed during the lockdown. Similarly, the share price of US auto retailer Carvana (CVNA) saw a decline of 87 per cent.

Biotech companies i-Mab (IMAB) and Kodiak Sciences (KOD) lost 90% of their value in 2022. China-based i-Mab saw its stock correct sharply when its partner AbbVie halted its cancer treatment drug trial. Previously, the biotech company was eligible to receive up to $1.74 billion in success-based payments. North-American Kodiak Science faced a similar fate after its flagship drug failed in a Phase III clinical trial.

Tech sector is dependent on growth, which did not happen

Software services was another sector that was deeply affected by low development and increased recruitment costs. For example, China-based Kingsoft Cloud Holdings (KC), a cloud services provider, reported a net loss of $533 million in the first quarter of 2022, followed by an even bigger loss of $803 million in the next three months. As a result, its shares traded up 87.6% year-over-year as of September 22.

Other examples in the tech sector include Tuya Inc. (TUYA), an artificial intelligence, and Internet of Things service provider. The company’s shares fell 83.7% in 2022 despite a successful March raise of $915 million, as Q2 revenue declined 27% over the previous year. Tuya also posted a loss of $187.5 million over the past 12 months.

Some other tech companies saw massive improvements of 80% or more in 2022, including Cardlytics (CDLX), Bandwidth (BAND), Matterport (MTTR), and Zhihu (ZH). Each of those examples had a market capitalization of $1.5 billion or larger as of the end of 2021, so those losses should not be ruled out.

Bitcoin is not underperforming, especially considering that many thought its digital scarcity would be enough to weather a turbulent year. Still, one cannot say that the stock market has performed much better in 2021, adjusting for historical volatility and gains.

As a result, volatility and sharp corrections are not exclusive to the region, and investors cannot simply dismiss the digital asset as a drop of 60% or 70% in 2022.

The views and opinions expressed here are those of Author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should do your own research when making a decision.

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