• Bitcoin had negative returns of around 65% in 2022, but public crypto companies did even worse.
• Coinbase, the popular crypto exchange, had a drawdown of 87%, while Core Scientific, one of the biggest Bitcoin mining companies, recorded a drawdown of 99%.
• Most of the major public mining firms saw drawdowns of 90% or more during the year.
The year 2022 was a challenging one for public companies in the crypto sector. According to a year-end report from Arcane Research, almost all of the big public crypto companies have underperformed Bitcoin this year, with mining firms taking an especially hard hit.
Bitcoin had a very difficult year, with negative returns of around 65%. However, the large public crypto firms performed even worse. Microstrategy, a company whose stocks offer exposure to BTC through its large reserves, saw a deeper year-to-date drawdown of about 74%.
The popular crypto exchange Coinbase had a drawdown of 87% in 2022, which has led to the firm being valued lower than meme coin Dogecoin. Core Scientific, one of the biggest Bitcoin mining companies, had the worst performance in the list, recording a drawdown of 99%.
Due to these large losses, Core Scientific had to file for Chapter 11 bankruptcy earlier in the month. Other BTC miners have also sustained major drawdowns this year, with most of them being 90% or more underwater for the period.
The reason for the mining firms’ especially poor performance is unclear, but the industry appears to be struggling to find its feet in the wider crypto market. With the sector continuing to be volatile, it remains to be seen whether public companies will be able to recover in the coming year.