Crypto’s ‘best’ performers during the 2022 market crash

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Crypto holders have had a rough ride in 2022.

At the start of the year, the collective market capitalization of cryptocurrencies worldwide stood at $2.2 trillion. By the end of the year, that figure stands at just under $800 billion.

Last year’s euphoric industry highs turned into a bear market of epic proportions, leaving many of the industry’s major players slumping. Or worse.

The crypto price crash started when central banks cut the cord on easy money policies, which drove risky assets first, and the problems multiplied from there, accounts took off. been frozen, declared bankruptcies, discovered frauds.

As Yahoo Finance’s Jared Blikre pointed out, whether in spite of the epic crypto slump or because of it, Yahoo Finance’s bitcoin (BTC-USD) quotes page took eighth place on the This year’s trending ticker page behind major stock indices like the S&P 500, Dow and Nasdaq, and three megacap stocks: Tesla, Apple and Amazon.

In 2021, cryptocurrencies powering Layer 1 tokens such as Ethereum (ETH-USD), Avalanche (AVAX-USD), Solana (SOL-USD), Polygon (MATIC-USD) and Cosmos (ATOM-USD) have stole the show.

This year, that battle for outrageous returns has boiled down to a competition for the least bad losses. And the results are more of a purse of cryptocurrencies rather than reflecting a clear theme about industry progress.

Ethereum (-68% since the beginning of the year)

After outperforming bitcoin by 355% last year, ether (ETH-USD) has become the 10th best performing cryptocurrency in 2022, dropping just under 70% this year.

Despite its performance, the second-largest cryptocurrency passed the mid-September Merge upgrade from proof-of-stake to proof-of-work, which turned out to be one of the few successes of industry in 2022.

The technological feat also allowed Ethereum core developers to embark on other initiatives aimed at improving transaction scaling, privacy, and the use of the protocol as a financial layer.

The story continues

Part decentralized banking layer and part technology platform, Ethereum still lacks the crucial feature of allowing investors to withdraw their staked deposits. As noted by Christine Kim, research associate at Galaxy Digital, Ethereum’s core developer team said the protocol upgrade in Shanghai, which will include staked ETH withdrawals, could be activated as early as March. 2023.

The merger made the Ethereum blockchain 99.95% more energy efficient and was a deflationary force on ether supply.

Bitcoin (-65% since the beginning of the year)

The world’s largest cryptocurrency fared better than some smaller counterparts, but was not immune to the market crash in 2022.

Bitcoin is down 76% from its November 2021 peak at $68,789 and is currently trading near $16,500.

Since speaking with Yahoo Finance in April, when bitcoin was trading at $41,000, Alex Thorn, head of research at Galaxy Digital, said he doesn’t think the market has changed its mind. on bitcoin (BTC-USD), which he sees as both “an option on a future where cryptocurrency is treated like digital gold” and a “protest against the central bank’s lack of credibility “.

Between its November 2021 peak and December 12, bitcoin investors returned $213 billion in realized losses according to data collected by crypto analytics platform, Glassnode.

“In terms of the outlook for next year, it’s really hard to be bullish on bitcoin and crypto in general given the precarious macro and monetary conditions,” Thorn added.

Dogecoin (-60% since the beginning of the year)

Largely held by retail investors, the original “meme” coin followed most of the crypto market in a selloff starting in Q2.

Still, Dogecoin fared better than many tokens in 2022.

However, unlike most major cryptocurrencies, Dogecoin (DOGE-USD) had already sold 64% since its May 2021 peak reached when Elon Musk appeared on Saturday Night Live through the end of 2021.

People know it’s a joke. They like the joke, Thorn told Yahoo Finance.

The Thorns team posted about DOGE at its peak in 2021, noting “a general lack of development effort” and “no serious long-term narratives or use cases”.

Still, Thorn’s team found that Dogecoin had a fair launch, meaning it didn’t include a presale or venture fundraiser, which can be a red flag when insiders hold large stakes that disadvantage outside buyers.

The cryptocurrency outperformed most others in the fourth quarter, largely thanks to Elon Musks’ deal to buy Twitter, with users speculating the purchase could have some benefits for Doge holders.

Ethereum Classic (-54% YTD)

With a loss of 53%, Ethereum Classic (ETC-USD) also benefited from speculation leading up to the merger.

While its community of users and developers is only a fraction of the size of Ethereums, Thomas Dunleavy, senior market researcher for Messari, pointed out that the small-cap token has steadily seen its value appreciate before software upgrades related to Ethereum.

As Ethereums Merge drew to a close, skeptical investors viewed Ethereum Classic and other offshoots of the second-largest cryptocurrency as a hedge or insurance policy in case the upgrade failed.

BNB (-53% since the beginning of the year) and OKB (-17% since the beginning of the year)

Tokens associated with exchanges such as OKB (OKB-USD) and BNB (BNB-USD) have both performed better than most cryptocurrencies this year.

BNB is the token associated with Binance, while OKB is the token of the OKX ecosystem.

However, as the recent developments of the FTX crisis and the corresponding collapse of its exchange token FTT have shown, the value of these tokens can change rapidly depending on the management of their corresponding crypto exchange.

Exchange tokens can offer holders specific benefits such as lower trading fees and the ability to vote on exchange decisions. Exchange tokens are also almost always tied to the success of a crypto exchange as a business, serving in part as business equity.

Monero (-42% since the beginning of the year)

As in previous years, the tension between transparency and privacy in cryptocurrency transactions has returned as an undercurrent through 2022.

Unlike Bitcoin and Ethereum, Monero (XMR-USD) offers users less censorable transaction privacy by default without requiring the use of crypto mixing services.

The more modest sale of Moneros this year suggests that its feature as a privacy coin offered users more utility than the majority of cryptocurrencies on the market.

Tron (-28% since the beginning of the year)

TRX (TRX-USD), the native cryptocurrency of the Tron blockchain, has outperformed most other cryptocurrencies, losing less than a third of its value this year.

The value of the tokens, according to Thomas Dunleavy of Messari, has primarily benefited from the growing amount of stablecoin volume of Tron ecosystems. TRX’s supply consumption is based on its level of trading volume.

As 2021 superstar LUNA imploded alongside its sister stablecoin TerraUSD (UST) in May, the Tron ecosystem launched its own decentralized stablecoin (USDD-USD). Activity on the Tron ecosystem network jumped 47% in the second quarter according to Messari.

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