2022 Crypto Year in Review – The Most Important Events of 2022
The first month of the new year has passed, and it appears that a bull market is on the way. Hopefully, the cryptocurrency industry will revive as soon as 2023. We recently talked about some of the 2022 events that impacted the crypto niche, and now we will remind you of the most significant events that occurred in the crypto market last year.
The crypto world has been on somewhat of a tumultuous ride throughout 2022, seeing a ton of key events that will shape the industry forever. At the same time, traditional financial markets have also been hit, with the USA entering a period that fits the technical definition of a recession – crypto’s first recession.
With all these firsts, let’s reflect back on 2022 and see if we can learn some lessons from the smoldering fire that was the year 2022.
All-Time High for NFTs (January)
NFTs have taken a bit of a back seat lately, but back in January 2022 NFT trade volume was at an all-time high. This prompted many CEXs to dive head-first into the NFT world, launching their own marketplaces. With the likes of Gate.io, Coinbase, Kraken, and crypto.com all getting stuck in. However, the NFT hype quickly died down following the first negative market events. This suggests that they could be prone more than other crypto assets to volatility.
Russia-Ukraine War Escalates (February)
Back in February, Russia decided that it was time to turn up the heat in its slow-burning invasion of Ukraine, mounting a full-scale invasion.
Destroying ports, main roads, farms, and mines, Russia crippled the global grain markets. As a result, Russia got slapped with sanctions and the EU even demanded that banks and crypto exchanges cease doing business in the country.
While the war still rumbles on, the effects on the global financial markets will be felt for a significant period.
President Biden Signs Crypto Executive Order (March)
President Joe Biden signed an Executive Order that demands the government to examine the risks and benefits of cryptocurrencies.
This will likely result in wider regulations for cryptocurrencies but given the fallout from FTX at the end of the year, many will agree that it’s about time this happened.
Not much has happened as of January 2023, but the wheels of congress are slow turning. This will be one to keep an eye out for in 2023.
LUNA Collapses (April-May)
LUNA was pegged to be the future of the stablecoin world with its dynamic asset-balancing features.
However, as Bitcoin slid on the back of global markets reacting to Russia’s invasion of Ukraine, LUNA and Do Kwon could no longer keep the 1:1 peg for LUNA’s UST stablecoin product.
As a result, the blockchain crashed and investors lost around $2 billion. Do Kwon is still on the run and stablecoins are being closely monitored for similar defects.
The FED Starts Quantitative Tightening (June)
With global markets starting to suffer heavily from the fallout of the ongoing Russia-Ukraine war, the FED hiked inflation rate and started quantitative tightening. This simply means that it’s reducing its balance sheet. This had the potential to be a terrible move, but it was carefully controlled and managed to help get a handle on the inflation crisis. Still, as we’re heading into 2023, inflation in the USA is still out of control and we’re going to see more quantitative tightening continue.
EU Takes Steps to Regulate Digital Assets (July)
The EU has had an obsession with regulating digital assets, throwing multiple proposals out there. One of these steps was the introduction of MiCa (markets in crypto-assets) bill.
This is designed to create a harmonized level of crypto regulation throughout the bloc. On paper, this is a fantastic idea as all EU countries will have a base guideline of the bare minimum, helping spread adoption. Those that wish to go further can add to their implementation of MiCa.
The first rendition of MiCa is set to be a light touch that introduces AML and KYC policies, while identification of private wallets is set to drop in a later edition of the regulation.
BlackRock Partners with Coinbase (August)
By the end of summer, crypto markets had taken a massive beating, with multiple exchanges making major layoffs. A big win was needed, as well as a major injection of cash. So, in August it came as a relief when BlackRock opted to partner with Coinbase to create a crypto on-ramp for its end-to-end investment management platform, Aladdin. Coinbase Prime will be used for crypto trading, custody, brokerage, and reporting under the deal. This saw millions of dollars flow into crypto markets, helping to stem the bleeding markets saw throughout the summer.
The Ethereum Merge (September)
The crypto world has been fixated with Proof of Work being bad for the planet for quite some time, not to mention its limitations for progressive blockchains, such as Ethereum. To remedy this, Ethereum promised a switch to Proof of Stake (PoS) several years ago and managed to deliver on these promises in September. Not only did Ethereum swap over to PoS, but it also introduced a deflationary mechanic. Early ETH2 stakers were left out in the cold, though, as the Ethereum Foundation removed plans to make it possible to unstake those funds from their long-term roadmap, meaning billions of dollars in ETH could be trapped for the foreseeable future.
Google Cloud Partners with Coinbase (October)
Coinbase had a busy 2022, announcing deals and partnerships with some major brands. Despite this, it still ended up cutting around 50% of its workforce over two separate layoff events during the year. In October, Coinbase announced it was teaming up with Google Cloud to provide payment services in web3. There are 4 prongs to this deal, with payments being a major aspect of it. The other major component of the deal is data. Coinbase Cloud’s Node service will allow developers to get speedy access to rich data, which is a major win for those building in this bear market!
Elon Musk Buys Twitter (October)
It was a long time coming, but Elon Musk finally coughed up the cash and bought Twitter. The entrepreneur quickly started making changes, cutting the workforce significantly.
But, the biggest boost for the crypto world was the adjustment of filters and content suppression. Must revealed that suppression of multiple industries was rife on the platform, giving Crypto Twitter a new chance to shine in the light.
A lot has gone on since the Twitter takeover, most of which has been positive for the crypto world!
FTX and Alameda Research Explode (November)
After a tumultuous year full of negative sentiment, the crypto world was hoping November would be quiet. But, one to always keep us entertained, Changpeng Zhao decided to bring FTX crashing down with a single Tweet. It turns out that FTX had been playing hooky with client funds, lending them out to its investment arm, Alameda Research, which was under the control of legendary FTX CEO Sam Bankman-Fried’s ex-girlfriend.
Client deposits were gambled away, stolen, and siphoned off to the US Democratic Party in the form of donations to the tune of more than $2 billion. This event sent crypto markets into a meltdown that’s still being felt today. On the back of this, crypto exchanges around the globe began publishing proof of reserve audits to show that customer cash is safe, which appears to be the only positive outcome of this event.
Lessons Learned from 2022
In what was a crazy year, there have been some major takeaways from 2022. The most important one, in our eyes, is that CEXs simply cannot be trusted. The various proof of reserve audits that came flooding out were half baked and didn’t cover all assets, suggesting that swathes of cryptos may not actually be there.
Massive outflows of crypto from exchanges into cold storage private wallets appears to be the main takeaway from 2022. Remember, if they’re not your keys, it’s not your crypto.
It turns out that yes, global financial markets do have a major impact on the crypto world, and this suggests that a recession could be catastrophic for crypto, especially the vulnerable NFT market that many CEX’s have pinned their hopes of survival on.
What will 2023 have in store for us? We’re not too sure, but that’s the best part! Let’s sit back, build, and see what this year brings us.Choose Bitmedia!