Has 2022 been too eventful for you to follow everything that has happened in the cryptocurrency world? No worries, Clubic has brought together all the highlights of the year for you in this retrospective.
2022 was supposed to be a bright year for cryptocurrencies. Almost left for dead after a three-year bear market, digital currencies experienced another phenomenal rebound with the COVID crisis, a rebound that extended into 2021. Unfortunately, 2022 sounded different. Between collapsing prices and global scandals, crypto-currencies end the year on their knees.
The COVID bubble partially bursts
These are the figures that speak best of the past year. While the price of Bitcoin pranced at just over $50,000 at Christmas 2021, in one year it collapsed by more than 60% to reach the $17,500 line today.
And since other market values almost always follow the trend (up and down) of the Bitcoin standard, it was the whole market that plunged. Some popular crypto-currencies such as Solana have thus seen their unit price divided by 10 in 2022. As a result, the market capitalization of the entire market has melted since December 24, 2021. It is today about 830 billion dollars, against about 2,400 billion dollars a year before.
These setbacks confirm the strong correlation between the rise in prices in the sector and the repeated injections of liquidity by central banks. After the great plans of the no matter what that followed the COVID-19 pandemic, the aggressive raising of interest rates on both sides of the Atlantic, but also inflation and the war in Ukraine reversed the trend.
NFTs look gloomy
The collapse of LUNA, the warning shot
And if the depreciations mentioned so far are already enough to make your head spin, none can compare to the cataclysmic collapse of the LUNA. The Terra blockchain token, which last spring still belonged to the top 10 cryptocurrencies, with a market capitalization of almost 30 billion dollars, collapsed in a few days. While it was listed at around 85 dollars on May 5, 2022, it was worth almost nothing a week later!
This fall, unprecedented at this level in the sector, would be due to attacks on the algorithmic stablecoin UST, leading to its de-anchoring (depeg) from the dollar. If, since then, many theories have flourished on the entities potentially at the origin of this attack (BlackRock, Sam Bankman-Fried or even the parent company TerraForm Labs…), one thing is certain: the loss is phenomenal.
It is thus estimated at around 60 billion dollars. A hard blow whose effects are in a sense still felt. Since the collapse of the Terra ecosystem, the crypto market is indeed sinking slowly and gradually into a new bear market.
FTX, the biggest scandal of the crypto era
And yet, we had not yet seen everything. As the end of the year loomed in a sluggish atmosphere for cryptocurrencies, the FTX scandal exploded. The second crypto exchange, behind the inevitable Binance, declared itself bankrupt on November 11, to everyone’s surprise.
Since then, the hallucinating news is linked. FTX was selling fake bitcoins, mixing its clients’ funds with those of its sister company Alameda Research, and even speculating with that money. These illicit actions could cause many victims, since nearly 1 million customers risk losing the sums they had placed on the platform.
And even though Sam Bankman-Fried was eventually arrested, the scale of the potential scam is still being felt. The BlockFi lender, closely linked to the company, thus went bankrupt. For its part, Binance also suffers from the current atmosphere of suspicion which aggravates the rumors of a possible American investigation for money laundering. Thus, in one week, the equivalent of 3.6 billion dollars was withdrawn from the exchange.
What to say that it will surely be difficult to do worse for 2023. Even if, of course, crypto-currencies have accustomed us to surprises!
Source : Bloomberg
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