As the year rolls out, I decided to recap the events that left a mark on all of us crypto users, investors, traders, developers and all-round cryptonians.
Overall, 2022 proved to be a really tough year for crypto. Possibly the worst bear market we’ve experienced to date. Let’s recap the events that shaped the year and you can judge for yourself, whether this was indeed the worst. I will compare it to the 2014 bear market, which up to this moment, holds the title of the worst bear cycle in crypto history. Let’s see how did we fair…
Bitcoin (BTC) began 2022 with a market valuation of around $42,400 and ends the year around $16,500 – a drop of approx. -65%
Ethereum (ETH) started the year with a price tag around $3700 and wraps up the year around $1200 – a drop of approx. -68%
Unlike previous bear markets, some altcoins, like TRX, LTC, Doge, XRP and BNB have outperformed the two giants of crypto and printed lesser drops in value.
It is worth noting that LTC, XRP and TRX did not perform too well throughout the bull run that preceded, so this has to be taken into account – the higher the pop, the bigger the drop. BNB is the obvious exception here, as it performed spectacularly well in the bull market and preserved its value the best out of the top 10, despite the recent backlash and fud surrounding Binance that is still ongoing.
Year Review Month-by-Month:
- Riding the hopium of the bull run of the previous year, El Salvador President makes a bold prediction for Bitcoin to reach $100,000 in 2022.
- Opensea, the biggest NFT marketplace raises $300 M in series C funding – later on, NFTs sales will drop significantly, but at the start of the year, they are still hot property.
- SHIBA INU is the most accumulated token by Ethereum Whales for reasons beyond anyone’s guess. The developers tease a big new release that never happened.
- Bank Of America claims that Solana could become the “visa” of the crypto ecosystem, rivalling Ethereum. Later in the year, Solana will drop out of the top 10 ranking and prove to be nothing more than hype.
- A 22-year old Indonesian boy makes a million dollars selling NFTs of his selfies on opensea.
- Mozilla stops accepting crypto, the bear market chills begin.
- Cardano outperforms other major competitors in volume, sees 11% increase in block size. Kraken positions it ahead of Ethereum.
- Retail investors are still bullish, buying every dip. This will soon come back to bite them as crypto winter gets worse.
- North Korea continues to steal crypto through various hacks in order to subsidize its nuclear weapon programme.
- BlockFi settles with the SEC for $100 million over its high-yield lending product. This marks the beginning of the end for the crypto lender.
- Ethereum outperforms Bitcoin in the run up to its major upgrade, everyone gets excited about the “Flippening” which, just like every other time before, fails to materialize.
- The Superbow features uber-expensive ads by top crypto comapnies: Coinbase, FTX exchange and Crypto .com – mainstream media draws parallels to Pets. com and other dotcom epic fails.
- RBI talks about banning crypto in an attempt to curb interest and push forward its own digital rupee.
- Russia begins advances toward Ukraine, starts a full-blown invasion. Crypto market responds with a significant drop.
- Russia is outed to be using crypto ransomware and money laundering along with China.
- Crypto is being used for donations to Ukraine and by Russia to bypass sanctions.
- Ebay rumoured to add crypto payments by March 10. It didn’t happen.
- Metamask is reported to be blocking IPs in Iran and Russia in compliance with US sanctions. Users are outraged.
- EU considers banning BTC mining. This doesn’t get the vote, but they implement KYC on all exchanges, including on money coming in from cold wallets.
- Bored Apes Yacht Club launches Apecoin.
- Canadian government stops protestors from cashing out their crypto.
- Thailand bans crypto payments.
- BOE starts warming up citizens for its CBDC and outlines framework for regulating crypto.
- Ripple co-founder Chris Larsen angers the crypto community with a proposal to change the Bitcoin code to POS – joins Greenpeace campaign called “Change the Code, Not the Environment”.
- Ronin, the blockchain network that runs the popular nonfungible token (NFT) crypto game Axie Infinity, is hacked for $625 million – the first of a series of big crypto crashes of the year.
- Elon Musk considers buying Twitter after acquiring a large stake but is rejected as a board member. He later backtracks from the deal, but is forced into it by the courts. As a result, Dogecoin makes another minor pump but is very short-lived.
- Binance commits half a billion USD to Elon’s twitter bid.
- On May 7, over $2 billion worth of Terra’s UST tokens is unstaked and hundreds of millions of dollars are quickly liquidated.
- UST was an algorithmic stablecoin backed by Terra’s token Luna and as it loses its peg to the dollar causes a collapse of Luna which drops by 98% in a day and investors lose big. For a moment it seems this will be the worst crypto crash of the year. Sadly, it’s only the first and there’s a lot more to come.
- Warren Buffest makes another dig at Bitcoin, says he wouldn’t pay even $25 for all the bitcoin in the world.
- Cardano adds over 2000 new wallets daily in just one month, despite market volatility. Its network activity becomes second to Bitcoin.
- Central African Republic Adopts bitcoin as legal tender.
- The Merge (Ethereum’s biggest upgrade) is scheduled for August.
- Impatient investors are asking has Bitcoin found a bottom yet… they will later find out that a bear market takes well-over a year.
- New York state passes a Bitcoin mining moratorium on the back of the heated media fud about excessive energy consumption. Bitcoin analysts point out that the network uses less than 1% of the world’s energy.
- New York appoints a new mayor who is an avid crypto proponent.
- Solana suffers another network outage – proves to be unreliable and very much centralized.
- Market sees a short term relief rally, Bitcoin breaks above $31k fuelling a wave of hopium for the end of the bear market. Unfortunately, this remains only a short term rally.
- Paypal enables crypto withdrawals to external addresses in the US for the first time.
- Cardano appears as the most held crypto in a bear market
- Bitcoin crashes again, hits an 18-month low amidst high inflation and the biggest interest rates hike by the Federal Reserve in 28 years.
- Litecoin adds a privacy feature, gets delisted from exchanges in South Korea.
- Crypto Hedge Fund Three Arrows Capital suffers from the Terra Luna collapse and lines up for liquidation. Becomes the second big crypto collapse of this bear market.
- Soon after, Celsius, one of the biggest CeFi lending services finds itself in a liquidity crisis, fails to resolve the issue and becomes the next in line to file for bankruptcy.
- Crypto investors continue being hammered. On July 6, prominent cryptocurrency investment firm Voyager Digital files for bankruptcy after 3AC defaulted on a $650 million loan. It’s a chain reaction going back to Terra Luna, but the worst is yet to come…
- Following 3AC liquidation, Blockfi becomes insolvent but is bailed out by FTX.. for a short while.
- Crypto winter temperatures drop to freezing levels, “Experts” start talking about $10,000 Bitcoin price tag.
- Developer of opensource coin-mixer Tornado Cash is arrested in Holland upon charges of facilitating money laundering.
- EOS undergoes a rebranding and gives investors new hope of revival.
- Ethereum implements its biggest upgrade The Merge, becomes deflationary token, and moves to a POS mining mechanism.
- Cardano implements Vasil hard fork successfully.
- Colombia announces its own CBDC
- Ethereum miners censor Tornado Cash transactions raising concerns of centralisation. To make things worse, it comes out that 42% of POS nodes are being controlled by just 2 addresses.
- Bitcoin mining difficulty reaches ATH, profitability drops, some miners capitulate.
- The UK FCA warns consumers about FTX exchange but nobody pays attention.
- Opensea daily volume hits a 15-month low indicating that NFTs have lost their mass appeal.
- By far the biggest collapse of the year – FTX exchange files for bankruptcy following a series of events, involving Binance sell-off of FTT token reserves and a very public spat on Twitter. CZ reveals shady operations of FTX key operators behind the scenes. The fifth and biggest crash of the year.
- This affects several other crypto companies that have been acquired by FTX, mainly Blockfi, which goes into liquidation too. With assets and liabilities ranging from $1 billion to $10 billion, Blockfi had over 100k creditors. In addition they had a $275 M debt to FTX. The application shows that the largest client had a balance of $28 million – imagine keeping such a huge amount with a third party custodian.
Not your keys, not your crypto – remember this.
- The saga of FTX is still the topic du jour. This creates a mass exodus from exchanges, customers fear for their funds and every big exchange, from Coinbase and Crypto.com, to Kucoin and Binance are all rumoured to be next in line to crash down.
- Proof of reserves (POR) becomes a popular new concept, but the regulators are not satisfied. The door is wide open for new regulatory bills to come into effect soon. Investors are left with cold feet, appetite for crypto is at its lowest. Fear is still ruling the market sentiment, the year ends on a low note.
In comparison, the 2014 Bear Market, which is considered to be the worst to date, had one really bad month – February, when is was all doom and gloom – it all came crashing down in just one month that seemed like crypto will be obliterated.
First, Apple bans all crypto related apps on its platform, then Silk Road 2.0 gets hacked and more than 4000 BTC is stolen from there and to finish it off, Mt.Gox, the exchange where almost all of crypto trading was being conducted, falls apart, with more than 750,000 Bitcoin going missing – at the time, this amounts to about $400 M – I know, the amount is far greater today, but at the time, that’s less than a billion dollars, while this year we lost well over 4 billion dollars from Three Arrows, Voyager Digital, Terra Luna, Celsius and FTX combined. The losses are greater and the users who suffered are greater in numbers too.
From where I’m standing, I could safely conclude that this year presented far more challenges and capitulation than 2014, and if you are still standing, if you survived the crypto massacre this year, you are deservingly a crypto OG in my opinion.
You just survived the worst.
You are now more experienced, more knowledgeable and better equipped for what is coming next.
At least, I can say that the worst is behind us. Yes, we can still see some more bumps on the road ahead, perhaps regulation will kick-in from next year and we might see more restrictions for crypto usage, perhaps another exchange will come crashing down, or hackers might target some of the bigger platforms, but if you’ve learnt your lesson from this year, you will not be keeping your coins on exchanges for longer than a couple of days, you will be using self-custodial wallets, avoid the lenders and third party miners or traders and all those “done-for-you” schemes, and you will rely on your own skills whether it be for trading or simply investing.
You will be able to re-enter the market on the low end. We are still bottoming out and there’s plenty of time. 2023 will give us more buying opportunities, and you will be able to reap the rewards during the next bull run, which I expect to begin toward the end of 2023 and beginning of 2024.
I will of course, be with you along the way, I will keep posting valuable crypto content, from market analysis and price updates, to the latest news and charts that you need to pay attention to.
So here we are my friends, we finish off this year with a few bruises, some more than others, but if you’ve been following this channel for a while, you know I’ve been saying all along – Don’t hold altcoins in a bear market, they get slammed hard. Most are already at 80-90% negative, some are 99% negative – if you’re holding any crypto at all, during a bear market, I hope it is Bitcoin and maybe Ethereum, but anything else is a huge gamble and I hope it pays off. I exited at the start of the year and have been doing only short term trades all year round. I hope my price projections have helped and will continue to help you to be a better, more successful trader.
Happy new year and see you in 2023!