Bitcoin’s 60% year-to-date correction looks bad, but many stocks are down even more

Bitcoin (BTC) and Ether’s (ETH) price declines of 60% and 66% are drawing a lot of criticism from crypto critics, and perhaps deservedly so, but there are many stocks with similar, if not worse, performances.

The high volatility seen in crypto prices is due in part to the bankruptcy of major centralized production and lending platforms, the loss of capital of Three Arrows and a few exchanges and mining pools experiencing liquidity problems.

For cryptocurrencies, 2022 was definitely not a good year, and even Tesla sold 75% of its Bitcoin holdings in Q2. The quasi-trillion dollar company still holds a $218 million position, but the news certainly didn’t help investors’ perception of Bitcoin’s corporate adoption.

Cryptocurrencies are not the only ones affected by central banks issuing stimulus measures and raising interest rates. A handful of billion-dollar companies around the world are also affected, with losses expected to exceed 85 percent by 2022 alone.

Cash-starved companies have seen steep declines in share prices.

Unlike cryptocurrencies, companies, especially those listed on stock markets, are dependent on financing – the money is used for mergers and acquisitions or day-to-day operations. That’s why interest rates set by central banks have a significant impact on debt-heavy sectors such as energy, auto sales and technology.

Shares of Saipem ( SPM.MI ), an Italy-based provider of oil and gas engineering and exploration services for onshore and offshore projects, fell 99.4 percent in 2022. In the year

Uniper ( UN01.DE ), a German energy company with more than 10,000 employees, has been hit hard by the disruption of its Nord Stream 2 gas pipeline project, forcing it to bail out 15 billion euros by July 2022. However, due to rising energy prices, Uniper was unable to fulfill its contract and was nationalized by the German government in September 2022. As a result, the stock is down 91.7% year-to-date, down from a $14.5 billion valuation.

Cazoo Group Ltd (CZOO) currently has a market capitalization of $466 million, but the auto retailer is valued at $4.55 billion by the end of 2021, a 90% loss. However, the UK-based company has thrived during the lockdown restrictions by offering a way to buy and rent cars online. Similarly, US auto retailer Carvana ( CVNA ) saw an 87 percent drop in its share price.

Biotech companies I-Mab (IMAB) and Kodiak Sciences (KOD) They have lost 90% of their value by 2022. China-based I-Mab saw its shares right after its partner AbbVie halted its cancer drug trials. Previously, the biotech company was eligible to receive up to $1.74 billion in performance-based payments. North America’s Kodiak Sciences suffered a similar fate after its lead drug failed a Phase 3 clinical trial.

The technology sector is dependent on growth, which has not happened

Software services was another sector heavily impacted by lower growth and hiring costs. For example, China-based Kingsoft Cloud Holdings ( KC ), a cloud service provider, posted a net loss of $533 million in Q1 2022, followed by an even bigger deficit of $803 million in the next three months. As a result, the shares are down 87.6 percent year-to-date through September 22.

Other examples in the technology sector include Tuya Inc. (TUYA), an artificial intelligence and Internet of Things service provider. Despite successfully raising $915 million in March, the company’s shares are down 83.7% in 2022. Tuya has accumulated losses of $187.5 million over the past 12 months.

A handful of other tech companies have seen broad corrections of 80% or more by 2022, including Carditics ( CDLX ), Bandwidth ( Bandi ), Matport ( MTTR ), and Zhihu ( ZH ). One of those examples had a market capitalization of $1.5 billion or more at the end of 2021, so those losses shouldn’t be dismissed.

There’s no sugarcoating Bitcoin’s lackluster performance, especially considering that many thought the digital currency was strong enough to weather a tumultuous year. Still, adjusting for historical volatility and gains in 2021, the stock market can’t say much better.

Therefore, volatility and sharp corrections are not unique to the sector, and investors cannot simply dismiss digital assets due to a 60% or 70% decline in 2022.