2022 hasn’t been a pretty year for cryptos. In a nutshell, the market lost over $1.4 trillion in value across the industry. In fact, the market has shed over $2 trillion from the November 2021 $3 trillion market cap peak.
During the course of the year, prominent protocols such as Luna and Celsius collapsed, the US Federal Reserve started hiking interest rates causing a liquidity crunch, Tornado Cash was sanctioned by the US Treasury, and then – to top it all off – one of the biggest exchanges in the industry, FTX, filed for bankruptcy.
There were some positive events during the year, such as the Ethereum Merge, but the great market crash overshadowed any positivity.
From wars to social media giant acquisitions, US Interest rate hikes to crypto exchange bankruptcies – here are the key highlights for 2022 in a crypto nutshell.
2022 in a Crypto Nutshell:
After a very bullish 2021, the market was bound to start unwinding, and that’s precisely what happened in 2022.
The total market capitalization for the entire industry started the year above $2 trillion. Over the course of the year, the market shed over $1.4 trillion to reach the current $860 billion level;
A string of global macro-socio-economic events injected fear into the market, causing the industry to start capitulating over the course of the year.
Here are the year’s major events in a nutshell.
Q1 – Ukraine War, Biden Executive Order
Bitcoin Opening Price: $46,230
Bitcoin Closing Price: $45,520
% Change: -1.5%
Bitcoin opened the year above $46,000, but this wasn’t going to hold for very long as Russia started to mobilize its troops on the border of Ukraine, preparing for an invasion. Throughout February, reports of a potential invasion caused uncertainty within the markets, leading to a steep drop in Bitcoin’s price as it fell as low as $33,000 in January.
The Russian invasion put the entire market on edge. Alongside it being the first European war in a long time, it created a global energy crisis as fuel prices started to rise rapidly.
However, despite the impending war on European soil and the beginning of an energy crisis, Q1 might have been the strongest-performing quarter for Bitcoin. After dropping as low as $33,000, the market started to recover through February and March to reach a high of $48,200 by the end of Q1, 2022.
Bitcoin price in Q1 2022.
The invasion didn’t occur until late February, and Bitcoin was already attempting a recovery.
The recovery was partly helped by Joe Biden, President of the United States of America, introducing an executive order on cryptocurrencies. The executive order occurred on March 9th, 2022, and demanded the government take a deep dive into the risks and benefits of cryptocurrencies.
Although it initially had the entire market on edge, with the crypto community being largely divided on its impact, the outcome following the executive order was almost a 30% rally to the $48,000 high set at the end of March.
The executive order sought to introduce a wave of much-needed regulation into the industry to provide oversight on topics relating to consumer and investor protection, financial stability, illicit activity, and responsible innovation. Overall, it was designed to investigate the future sustainability of the crypto markets and outlined how the US could remain competitive in the global industry.
It’s also important to note that the US Federal Reserve had started to hike interest rates at the end of March, but this impact was to be felt later in the year.
Q2 – LUNA Collapses and Fed Hikes Aggressively
Bitcoin Opening Price: $45,520
Bitcoin Closing Price: $19,925
% Change: -56%
Q2 was the quarter in which the cracks started to show within the market. The price of Bitcoin began to slowly grind lower during April as it finished the month at the price of $37,600. However, it wasn’t until May 2022 that the market started seriously beginning its capitulation.
The market wipeout began during the first few days of May. It was largely driven by the collapse of one of crypto’s biggest stablecoin protocols – The Terra Luna ecosystem.
On May 7th, the terraUSD stablecoin, UST, started to lose its $1-peg and dropped as low as 35 cents by May 9th. Simultaneously, LUNA, a cryptocurrency designed to keep UST pegged at $1, started to collapse as it fell from $80 to just a few cents by mid-May. At the time, the entire Terra Luna ecosystem was worth a whopping $18 billion, and it was ranked as one of the top-20 crypto projects.
By the end of the TerraUSD collapse, Bitcoin would lose over 35% as it fell from the May high of $40,000 to reach as low as $25,500.
Bitcoin Price through May 2022 – during the Terra Luna ecosystem collapse
During the peak of the collapse, it was estimated that the market shed an incredible $60 billion in a few days. By the end of the month, Binance and exchanges across the board suspended trading for all of the tokens in the Terra ecosystem.
The collapse of the Luna ecosystem caused a domino effect to ripple throughout the crypto ecosystem as a wave of prominent protocols and hedge funds started to implode.
One major casualty resulting from the fallout was the crypto lending protocol – Celsius Network.
By June 12th, 2022, Celsius had to freeze withdrawals, swaps, and transfers to respond to the “extreme market conditions” as rumors started to swell that the platform had become entirely insolvent. This news caused a new wave of capitulation in the Bitcoin market, causing the price to drop by another 40% from high to low in June as it fell beneath $20,000 – causing over $200 billion to be wiped out of the industry.
Bitcoin Price through June 2022 – during the Celsius Network ecosystem collapse
At the start of July, Celsius had already laid off around 23% of its workforce, and it eventually filed for Chapter 11 bankruptcy protection in the US on July 13th.
Adding further to the devastating market impact, Three Arrows Capital, one of the industry’s leading crypto hedge funds, collapsed at the end of June 2022. In March 2022, the hedge fund was managing around $10 billion in assets, making it one of the sector’s most significant crypto hedge funds. However, by the end of June 2022, the hedge fund was heading into bankruptcy courts.
One of the main reasons the hedge fund collapsed was mainly due to the TerraUSD breakdown.
The fallout from Three Arrows Capital caused a new wave of uncertainty within the industry as they owed creditors millions of dollars. For example, it was reported that 3AC owed $270 million to Blockchain.com, $670 million to Voyager Digital – a lending protocol that later collapsed as a result – and other loans to Genesis, BlockFi, and FTX – all of which are big names that collapsed later in the year.
To end the devastating second quarter of 2022, global macroeconomic markets were also starting to show cracks as the US Federal Reserve hiked interest rates at its most aggressive pace since the 1980s in an effort to combat rising inflation.
As a result of the overwhelming money printing in 2020 and 2021, an effort to stimulate the economy during the COVID-19 pandemic, inflation started to run rampant as prices began to soar across the board.
The US Federal Reserve had already started to hike interest rates in March and May 2022, increasing the interest rate by 25 BPS and 50 BPS, respectively – but more was needed to slow down the prevalent inflation.
In May 2022, the Consumer Price Index (CPI), an index measuring inflation in the economy, had soared to a new 40-year high of 8.6%, the highest record for the CPI in over 40 years;
To combat the rising inflation, the FOMC elected to increase rates by a total of 75 BPS in the June meeting- the largest interest rate hike in a single meeting since 1994.
They didn’t stop there. The US Federal Reserve continued to hike interest rates by a total of 75 BPS for the following three meetings – increasing the interest rate in July, September, and November 2022;
|FOMC Meeting Date||Rate Change (bps)||Federal Funds Rate|
|Nov 2, 2022||+75||3.75% to 4.00%|
|Sept 21, 2022||+75||3.00% to 3.25%|
|July 27, 2022||+75||2.25% to 2.5%|
|June 16, 2022||+75||1.5% to 1.75%|
|May 5, 2022||+50||0.75% to 1.00%|
|March 17, 2022||+25||0.25% to 0.50%|
The current Federal Funds Rate now sits at 4%, and although there are hints that the FOMC might decrease the pace of the hikes in December, they’re still going to let interest rates climb until inflation starts to cool off.
The impact of rising interest rates causes liquidity to be squeezed out of risky assets, especially the cryptocurrency industry. In addition, as interest rates climb, borrowing money becomes increasingly more expensive, which leads to fewer investors willing to inject any new funds into the market.
This has been one of the leading global macroeconomic factors that sent the cryptocurrency industry into a bearish freefall during the second half of 2022.
Q3 – Tornado Cash and Ethereum Merge
Bitcoin Opening Price: $19,960
Bitcoin Closing Price: $19,420
% Change: -3%
The third quarter of the year was relatively stagnant as Bitcoin started to move sideways after the devastating second quarter. Price action was relatively choppy during this period as Bitcoin started to recover through June and August to reach near $25,000. Unfortunately, Bitcoin rolled over from there and ended up finishing the quarter close to where it opened;
The main news events during Q3 included the Tornado Cash sanctions and the Ethereum Merge event.
In August 2022, the U.S. Treasury imposed sanctions on the decentralized cryptocurrency mixing service – Tornado Cash. It cited the protocol’s role in laundering billions of dollars of cryptocurrency through its platform and immediately prohibited U.S. citizens and businesses from using or being associated with the service.
The U.S. Department of Treasury’s Office of Foreign Assets Control – OFAC – enforced the sanctions and ensured that any US-based businesses would cease utilizing the protocol.
One of the brightest events of 2022 was the Ethereum merge event, which saw the Ethereum network shifting from an energy-intensive proof-of-work (PoW) blockchain to a more environmentally friendly and sustainable proof-of-stake (PoS) blockchain.
The Merge occurred in mid-September, turning Ethereum into a deflationary token after introducing new mechanisms into the blockchain. Unfortunately, the market didn’t see a positive rally following the Merge due to the enormous global macroeconomic forces and previous protocol collapses in the year’s second quarter.
Nevertheless, it did bring Ethereum into a new era of sustainability and scalability. The effects of the Merge will continue to be felt throughout 2023 and beyond, especially when the bearish sentiment starts to clear.
Q4 – FTX and SBF Disaster
Bitcoin Opening Price: $19,420
Bitcoin Current Price: $17,305
% Change: -11%
The year’s final quarter was perhaps the most disastrous for confidence in the crypto market after the devastating FTX collapse. The event saw one of the leading exchanges in the industry filing for Chapter 11 bankruptcy on November 11th. In addition, it caused the entire industry’s market cap to fall below $1 trillion.
The collapse took place over ten days in November. Everything started to tumble once CoinDesk revealed that Alameda Research, the trading firm from Sam Bankman-Fried closely related to FTX, held a considerable position of $5 billion worth of FTT tokens – the native token for the FTX exchange.
Then, Changpeng Zhao, CEO of Binance, announced that they would sell its entire position of FTT tokens – worth about $529 million. As a result of the tweet, FTT started to unwind, causing the position at Alameda Research to dwindle into nothingness and the FTX exchange to collapse. Investors began to withdraw their capital from the exchange quickly, and the company did not have enough liquidity on hand to pay all depositors.
Lots has been written recently about the collapse, so it’s not worth rehashing again. Instead, to catch up, take a look at this article.
The result of the collapse caused BTC to plummet by another 27% as it fell from above $21,500 to reach as low as $15,700;
That is pretty much where we are today.
2023 What to Look Out For – 2 Cryptos Ready to Blow
With 2022 quickly coming to a close, it’s time to look forward to 2023 and see what’s in store for the crypto industry.
The year will likely start on the same note that it ended – with great uncertainty and a bearish sentiment.
However, as the year progresses, the Crypto Winter will likely start to thaw out, and we will see some recovering prices in 2023.
At the same time, new projects built during the Crypto Winter will likely start exploding.
We’ve dug and found two promising cryptos ready to blow in 2023.
IMPT – Helping Crypto Go Green
IMPT is an up-and-coming project set up for success in 2023 as it attempts to help turn crypto green. The project intends to make it straightforward for businesses, individuals, and crypto projects to purchase genuine carbon credits to reduce their carbon footprint.
A carbon credit is a permit representing one ton of carbon dioxide being removed from the atmosphere. Large-scale companies typically purchase them to offset carbon emissions from industrial processes. However, the carbon credit market is convoluted for smaller businesses. In addition, with obscure pricing data, prevalent scams, and double-counting credits – individuals are often hesitant to enter the market.
This is precisely what IMPT seeks to change in 2023. They believe that everybody should have the opportunity to contribute positively to the environment, regardless if they can purchase carbon credits.
CO2 can’t be responsible for climate change – plants need it to grow – WRONG ❌
There's a limit to the amount the plants can absorb; deforestation increased this limit – RIGHT ✅
Tackle this issue by increasing your carbon credits with #IMPT now ⬇️https://t.co/8KSvC4GHjF pic.twitter.com/DuBI1I0sdT
— IMPT.io (@IMPT_token) November 30, 2022
Their Carbon Marketplace allows users to easily buy, sell, and retire carbon credits. The best thing about these carbon credits is that they are hosted as NFTs on the blockchain – making them entirely traceable and genuine. When a user wishes to retire a carbon credit, it’s sent to a burn address and totally removed from circulation.
One of the most promising features of the platform is its Shopping Platform, which allows shoppers to earn carbon credits while doing their everyday shopping. The project has managed to attract high-profile affiliates, all ready to allocate a percentage of sales margin to environmental projects like IMPT. When a shopper buys a product on the Shopping Platform, the sales margin is held as IMPT tokens until they have enough to swap for a carbon credit.
Some of the already signed-up affiliates include Netflix, Samsung, Nike, Puma, The North Face, Microsoft, and Hugo Boss. IMPT continues to add more high-profile affiliates each week.
The project is currently hosting a presale for the IMPT token, and they have already managed to raise a whopping $14 million;
The presale is approaching the final stages, and once finished, the IMPT token will be listed on top-tier exchanges, such as LBank, Uniswap, and Changelly Pro;
📣 Attention, #IMPT Crew! 📣
We are happy to announce that after the presale, the $IMPT token will be listed on @Uniswap, @LBank_exchange, and @ChangellyPro 🔥
The exact dates will be announced!
Grab $IMPT before the end of the presale! ⬇️https://t.co/8KSvC4GHjF pic.twitter.com/n93UPuApNj
— IMPT.io (@IMPT_token) December 2, 2022
With the presale almost over, you still have a chance to get in at what could potentially be the lowest prices available.
Dash 2 Trade – Helping Traders Become Consistently Profitable
Another fantastic project ready to help the industry become consistently profitable in 2023 is Dash 2 Trade, a world-class crypto analytics and intelligence platform.
One of the biggest problems facing trades is the ability to make decisions based on actionable insights. There are thousands of tokens, and the industry moves at lightning speed, making it extremely challenging for trades to keep up-to-date with all the latest developments. This is what Dash 2 Trade intends to provide for traders.
Dash 2 Trade is a fully featured platform, with:
➡️ Free charting
➡️ Custom watchlists
➡️ Specific price alerts
And more! 🦾
This is a tool built for traders, by traders that lets you stay ahead of others.
Don't miss out – learn more at https://t.co/cvX8pnV5F5 pic.twitter.com/fICuLLPEFY
— Dash 2 Trade (@dash2_trade) December 5, 2022
The Dash 2 Trade dashboard will provide actionable crypto trading signals, market predictions, and social analysis to help traders make informed trading decisions. In addition, it will provide in-depth market insights that will help traders create market-beating strategies to remain consistently profitable over the long term.
The unique social indicators from Dash 2 Trade can help traders spot coins that could potentially surge higher. Value in the crypto industry is typically driven by perception first, and socio-cultural movements in the space dictate market movements. That’s why social metrics are one of the most important features of Dash 2 Trade.
Furthermore, Dash 2 Trade will also offer a bespoke presale scoring system that will help traders avoid investing in scams, honeypots, and rug pulls.
📈 Dash 2 Trade crypto analytics platform – Crypto Presales feature 📈
Discover new crypto presale opportunities and save time using our custom ratings and algorithms.
Learn more at ⬇️https://t.co/ExvBBjKIU6 pic.twitter.com/CvZYNPuuWa
— Dash 2 Trade (@dash2_trade) December 4, 2022
The presale sector typically provides insight into where the general market is heading in the future. The Dash 2 Trade platform will provide essential metrics to help traders assess the legitimacy of presale tokens. The team will perform manual scoring of projects to determine metrics that cannot be evaluated by automatic software and then provide a score based on their findings.
Other features of the Dash 2 Trade dashboard include;
- Trading Signals with buy/sell opportunities
- Social sentiment and on-chain analysis
- Strategy builder
- New Crypto listings
- Trading competitions
Dash 2 Trade is currently hosting a presale for the D2T token, which will be required to access the pro features of the platform. Users will pay a monthly membership in D2T. The presale has currently managed to raise almost $8.4 million in funding and is already over 95% sold out;
If you would like to get hold of D2T at what could be the lowest prices, this is your final opportunity to enter.
The presale quickly gained traction after investors learned about the track record of the team behind the project. Previously, the team created Learn 2 Trade – an FX signals and education platform that attracted over 70,000 traders and became a cornerstone of the Forex industry. The same team has partnered with profitable crypto traders, quants, and AI developers to deliver a crypto-based platform to replicate the success of Learn 2 Trade in the crypto space.
Other Notable Mentions Primed for an Explosive 2023
Here are some other tokens to keep on your watchlist that are worth mentioning;
Silks is the world’s first derivatives-based play-to-earn metaverse that mirrors a sport that generates over $11 billion in yearly bets alone – thoroughbred horse racing. Silks aim to bridge the gap between Web3 and the real world by creating a platform that allows players to earn an income from real-world racing results.
Users are required to mint a Silks Horses NFT to start earning from the ecosystem. If you own the NFT of a racing horse that wins in its real-world races, you’re rewarded in the Silks metaverse.
The project is finally ready to open its doors in 2023 for the Spring 2023 racing season. Once opened, users waiting to earn from the P2E ecosystem can start seeing their dreams come true.
To participate in the ecosystem, users must first purchase a Silks Genesis Avatar NFT, which serves as their identity in the metaverse and lets users claim racing rewards.
The Silks Avatars were first sold earlier in the year, and top-tier investment firms and high-profile NFT collectors bought them. In fact, some Bored Ape Yacht Club holders even got in on the action to add Silks Avatars next to their BAYC NFTs;
There aren’t many Silks Avatars left, so you will need to be quick if you want to purchase one to participate in the Game of Silks.
Calvaria is another P2E ecosystem ready to explode in 2023. The project is attempting to be an ambassador for the crypto industry to prove that crypto can attract a mainstream audience that includes non-crypto natives.
The game is a battle card game that is set in a realm in the veil beyond death. It incorporates unique features such as a staking function, a user-orientated DAO, mini-games, and a scholarship system. The game comes with a free-to-play version and a play-to-earn version that lets users collect rewards.
The project is currently hosting a presale for its RIA token and has already raised over $2.2 million in funding.
Overall, 2022 hasn’t been a pretty year for the industry. However, after the explosive growth in 2021, there was bound to be a significant retracement of some form, as markets don’t keep rising endlessly.
Unfortunately, a series of high-profile protocol and hedge fund collapses led to a series of dominoes falling for crypto, causing trillions of dollars to be wiped from the economy. Currently, the market is facing a long Crypto Winter in which prices will continue to struggle as they move sideways until the bottom is found.
Nevertheless, the Crypto Winter provides users with an excellent opportunity to start accumulating promising tokens that are set to thrive in 2023. Tokens such as D2T and IMPT are ready for an explosive 2023 once they open the doors to their ecosystems.
Image by Miloslav Hamřík from Pixabay