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The Crypto Ice Age Is Here. It Could Get Even Worse.

For crypto investors, the only thing to celebrate about 2022 is that it is almost over. The industry is fighting for its life amid a cascade of scandals, bankruptcies, and fury in Washington over its freewheeling, if not fraudulent, ways. Bitcoin has lost 67%  since late 2021. The token market is down by $2 trillion in the same span—one of the biggest financial bubbles to burst in history. 

The carnage may continue. The bankruptcy of FTX and the criminal indictment of its founder, Sam Bankman-Fried, is likely to continue causing aftershocks well into 2023. Several crypto companies have frozen customer deposits due to exposure to FTX. Bitcoin has been rising lately as inflation appears to be easing, giving so-called risk assets a boost. But the macro forces that have pressured crypto all year—including higher interest rates and tighter global money supply—aren’t going away. 

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