It's been an absolutely brutal year for investors in Bitcoin and other cryptocurrencies.

Bitcoin has lost more than half its value in 2022. It is now valued at just over $241,000, but the price of a single bitcoin has fallen more than 65 percent below last year's all-time high of nearly 70 thousand dollars.

The value of all cryptos has fallen from around $2.2 trillion at the end of 2021 to just over $1 trillion currently.

Bitcoin, the world's largest cryptocurrency, accounts for about 42 percent of the total market, but 2022 has been just as dire for owners of other crypto-related assets, such as Coinbase.

Shares are down 75 percent so far this year.

Shares of rival Robinhood have lost half their value,

CNN

reports .

There are hopes that the worst for crypto may be over.

Bitcoin has gained more than 15 percent in the past week, and two other major cryptocurrencies are up even more.

Solana is up more than 35 percent in the past seven days while ethereum, or ether for short, is up nearly 45 percent.

Ether, the second most valuable cryptocurrency, is widely used to finance purchases of non-fungible tokens, or NFTs, the digital assets that have taken the collectibles world by storm.

Coinbase has also rallied, and was up 9 percent on Monday.

Software company MicroStrategy (MSTR), which had nearly 130,000 bitcoins on its balance sheet as of June 30, is up more than 35 percent in the past five days.

The return of cryptocurrencies could be vindication for the sector's biggest supporters.

At the same time, it should also serve as a reminder that the emerging market is likely to remain volatile for the foreseeable future.

Expect more volatility

Investors should also keep in mind that there may not be enough interest in cryptocurrencies to justify the thousands of coins, tokens, and exchanges out there.

If so, only the strongest cryptos will survive and thrive.

"Cryptos have seen a dotcom-like era," when many great ideas and companies were created, said Adam Grealish, head of investments at fintech wealth management Altruist.

But a number of not-so-great ideas and companies were also promoted, he added.

The same scenario is likely to apply to cryptos.

"With tougher markets, companies in weaker positions and with weaker business models will feel a lot of pressure," Grealish said.

Several cryptocurrency mining firms, which use computers to solve complex mathematical equations in order to generate new bitcoins, have grown significantly in recent days.

Marathon Digital ( MARA ) rose 21 percent on Monday and is up more than 50 percent in the past week.

Riot Blockchain (RIOT) is up more than 40 percent in the past five days while Hive Blockchain (HVBTF) and Bitfarms are each up about 25 percent.

So have bitcoin, ether and major crypto stocks finally managed to rally?

There are some hopeful signs.

Winners and losers

Two banks that offer cryptocurrency-backed loans and offer digital currency deposits, Silvergate Capital ( SI ) and Signature Bank ( SBNY ), each reported earnings and revenue on Tuesday that topped Wall Street forecasts.

It also appears that the sector turmoil has created a flurry of winners and losers in both publicly traded companies and startups.

Crypto lender Celsius was forced to file for bankruptcy earlier this month.

But private crypto giant FTX continues to thrive and now has a valuation of $32 billion.

FTX recently agreed to provide a line of credit to struggling crypto firm BlockFi, and the company's billionaire CEO Sam Bankman-Fried has talked about using FTX's financial strength to bail out other struggling crypto companies as well .

Bankman-Fried also has a stake in Robinhood and there has been recent chatter that FTX may want to buy the struggling brokerage firm.

Bankman-Fried denied these reports to CNN Business.

/Telegraph/

Keywords: