Six Numbers That Defined Cryptos Dismal 2022

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Illustration by Gracelynn Wan for Forbes

Crypto fell into a year-long hangover after a euphoric 2021. Still, there could be silver linings.

Cryptos 2022 was one of the biggest and toughest years on record. After an extremely bullish 2021 that saw Coinbase go public in the largest direct listing in history, the first bitcoin exchange-traded fund, and the inaugural cryptocurrency hitting almost $70,000 twice, the market has seen a dramatic reversal.

While high-profile meltdowns like the stablecoin terraUSD and its sister token luna, and of course Sam Bankman-Fried and the quick demise of FTX, will grab headlines and get most of the blame, crypto has also encountered a lot of trouble. Huge macro headwinds as the US Federal Reserve and its central bank counterparts around the world began to unwind the massively accommodative monetary policies instituted at the start of the coronavirus pandemic.

Despite these struggles, the verdict for 2022 will remain unknown for several years. For example, optimists view the bankruptcies of FTX, lender BlockFi, and hedge fund Three Arrows Capital, among others, as a necessary weed-out of fraudulent or irresponsible companies. If regulators use these unfortunate cases as the final push needed to take meaningful action on crypto, there could be a silver lining to all this pain.

But until then, here are six numbers that have defined crypto in 2022.

$1.46 trillion

The total drop in total crypto market capitalization in 2022. The figure was $2.3 trillion as of January 1, 2022. Today it has fallen to $843 million.

Crypto Market Cap Dropped in 2022

CoinGecko

This drop doesn’t even capture the full extent of the fall, as the value actually peaked on November 8, 2021, when it crossed $3 trillion.

The last time the crypto market capitalization was this low was on January 2, 2021, which was the very start of the pandemic-driven crypto bull run.

Crypto’s Market Cap Hasn’t Been This Low Since January 2021

CoinGecko86.31%

The percentage of Coinbases stock value has declined in 2022. COIN started the year at $251.05, before dropping to an all-time low of $34.23.

COIN has continued to set new lows this year

TradingView

The poor performance can be attributed to many factors, including falling crypto prices which are negatively impacting customer registrations and trading volume, the latter of which accounts for over 80% of Coinbases revenue. The stock took another hit after the crash of terraUSD/luna in May and the bankruptcy of FTX in November. Even though Coinbase was largely shielded from direct exposure by the two entities, its status as a guide to crypto weighed on its price.

Coinbase was not alone among crypto proxy stocks in its struggles. MicroStrategy, the world’s largest bitcoin holding company, fell 70.61%, and Marathon Digital Holdings, one of the largest publicly traded cryptocurrency mining companies, fell 89%. Silvergate Capital, a California-based bank that caters almost exclusively to crypto companies, is also down 89%. Silvergate is particularly hurt by its association with FTX, whose fiat currency deposits at the bank made up about 10% of its base of $11.2 billion.

Crypto stocks moved in tandem in 2022

TradingView

However, it should be pointed out that COIN and other crypto stocks were not the only ones struggling in this difficult environment. Top tech stocks such as Amazon, Netflix, Zoom, Meta and Tesla have all fallen more than 50% this year. However, these stocks rallied in November as Coinbase continued its descent following the collapse of FTX.

Other big tech stocks also saw significant declines

TradingView1.15 million

This number represents the number of unique active wallets (UAWs) participating in blockchain-based games. Builders keep building as they seek out the flagship apps that will take the industry beyond speculative mania. One sector that has seen notable growth this year is blockchain-based games. According to a report by DappRadar, games have become the most popular sector this year based on a metric called UAW which tracks the number of independent wallets that interact with an application. As shown in the graph below, its number of users has increased by 65% ​​year over year. The top two titles were fighting games Splinterlands and Alien Woods.

Blockchain-based games will take a major leap forward in 2022

DappRadar

In comparison, DeFi applications only grew by 2%. In fact, the total amount of value locked (TVL) in DeFi applications fell by $125.3 billion. TVL is not a perfect measure, as it largely reflects the spot value of assets held in DeFi and falling values ​​do not necessarily indicate an exit, but it is an important data point. Many entrepreneurs hope that verticals such as DeFi and blockchain gaming will become cross-pollinators in the coming years and create symbiotic relationships.

Anyone who follows crypto knows how volatile the market can be. Forbes CryptoAsset & Blockchain Advisor examines the universe of viable crypto assets with exclusive analysis and insider crypto knowledge to guide you to the best choices.

$100,000

This is the amount Sam Bankman-Fried, founder of crypto exchange FTX claims to have left in his bank accounts from a fortune that reached up to $26.5 billion in DATETK, ranking him 32nd on the Forbes 400 list. He is currently out of jail on $250 million bond, secured by his parents’ home in Palo Alto, Calif., where he will remain confined until his trial. Bankman-Fried currently faces eight counts of fraud and conspiracy as well as separate civil charges from the SEC and the Commodities FuturesTrading Commission. For full Forbes coverage of the FTX collapse, click here.

Sam Bankman Fried, co-founder of FTX, photographed by Guerin Blask for Forbes in September 2021. Guerin Blask/Forbes Collection

Guerin Blask/The Forbes Collection3 billion dollars and more

The amount of crypto that has been stolen this year by hackers and fraudsters. While the debate continues regarding the real usefulness of cryptos for hackers, on the one hand they are carrying assets but on the other hand everything on a blockchain is theoretically traceable even years after the fact, it is undeniable that the bad actors see the asset class as a juicy target.

According to cryptocurrency firm Chainalysis, October (the last month data was available) was the worst month for hacks on record ($718 million stolen).

A particular target for hackers this year were bridges, portals between blockchains that allow users to transfer assets from one platform to another. At least $2 billion of the total stolen comes from bridge hacks, the two biggest being a February $320 million attack on Wormhole, which connects Ethereum and Solana, and a March $600 million exploit of Ronin. , a bridge used by players of the Axie Infinity blockchain-based game.

Bridges were a major target for hackers in 2022

On-chain analysis15

FILE – Chairman Maxine Waters, D-California, right, and Ranking Member Patrick McHenry, RN.C., left, listen to testimony from banking executives as they appear before a House committee hearing on the financial services on Capitol Hill in Washington, September 21, 2022. Lawmakers plan to investigate the failure of FTX, the major crypto exchange that collapsed last week and filed for bankruptcy, leaving the investors and customers face losses that could total billions of dollars. (AP Photo/Andrew Harnik, File)

Copyright 2022 The Associated Press. All rights reserved

The number of congressional hearings held this year that primarily focused on crypto and blockchain policy. The most active committees were the Senate Banking and House Financial Services panels, which devoted time to everything from trying to understand the implications of privately-issued stablecoins for the financial system centered on the US dollar trying to figure out how Congress can guarantee that major hit-ups like FTX never happen again. There is optimism in some crypto circles that the scale of FTX’s collapse will instill a sense of urgency in lawmakers to make meaningful progress next year.

Part of the challenge for lawmakers is settling turf wars between competing agencies vying for primacy in the crypto market. The SEC, led by Chairman Gary Gensler, has taken an industry regulation-by-enforcement approach, relying on specific actions such as filing insider trading charges against a former Coinbase employee. and associates and celebrity Kim Kardashian for promoting a token called ethereum max without telling her followers that she was paid $250,000 to do so. On the other hand, the CFTC is taking over. New legislation may be needed to settle this debate, and the dividing line may come down to whether or not it is possible to determine whether cryptoassets are securities.

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