From the well-known Bitcoin to numerous altcoins, central to decentralized cryptocurrency exchanges, and Web 2.0 to Web 3.0, the cryptocurrency industry has become an integral part of the global economy.
However, the industry is also prone to various issues such as hacking, exchange collapses, fraudulent activities, macroeconomic factors, and severe market crashes. As we look back at the events of 2022, here is a summary of some of the key happenings in the cryptocurrency industry:
January: Bitcoin Price Plunges
The start of 2022 was not positive for the cryptocurrency market, as Bitcoin experienced a significant drop in price to $32,000 from its all-time high of $68,915 in November 2021. This decline led some investors and newbies to buy more cryptocurrencies. Despite the decrease, Bitcoin was worth twice as much as it was in January 2021. The effects of this loss are still being felt as of the writing of this article.
February: Russia-Ukraine War Affects Crypto Market
Another factor contributing to the dip in the cryptocurrency market was the Russia-Ukraine war that began in February. This conflict caused the market to plummet, and Bitcoin hit another low point. Several people and organizations used cryptocurrency donations to assist Ukrainians during the war.
According to reports, the Ukrainian government and NGOs raised over $63 million through 120,000 cryptocurrency donations. In addition, there were also donations made through NFTs, including a $200,000 donation from CryptoPunk. Major cryptocurrency addresses, including Bitcoin, Ethereum, Polkadot, TRON, Solana, and Dogecoin, received donations totaling over $54 million.
In February, there was news surrounding the sports brand PUMA, which registered an ENS domain for its NFT collections and changed it's Twitter handle to Puma.eth.
March: Crypto Market Sees Modest Gains
March saw modest gains in the cryptocurrency market, which helped Bitcoin bounce back above $48,000. There was also an event involving the next generation of Pokemon, the Pixelmon AAA game metaverse project, which faced significant criticism after the NFT characters in the game were poorly designed and misshapen. This did not meet the expectations of metaverse enthusiasts.
April: Coinbase Launches Beta Version of NFT Marketplace
In April, Coinbase released the beta version of its NFT marketplace, allowing users to preview and explore the first versions of NFT collections on the Ethereum blockchain. The beta version also allowed for the buying and selling of NFTs on the Coinbase NFT marketplace.
There was also negative news for the NFT industry in April, as the Bored Ape Yacht Club (BAYC) lost over $14 million in NFTS following a hack of its Instagram account and Discord server. However, there was positive news for the NFT sector as well, as Moonbirds NFT saw a surge in sales, reaching $200 million and leading to an increase in its trading volume.
May: Terra LUNA and TerraUSD/UST Stablecoin Collapse
May was a difficult month for the cryptocurrency industry, as the market saw a significant price crash following the collapse of the Terra LUNA and TerraUSD/UST stablecoin. On May 9, TerraUSD decoupled and plummeted to $0.11, causing the prices of all cryptocurrencies to drop. At this time, Bitcoin fell to $26,000 from $40,000.
The CEO of Terra Labs, Do Kwon, was reported missing following the incident. It is believed that the collapse was caused by rising interest rates, suspected malicious attacks on Terra's ecosystem, and over $2 billion in UST was unstacked from Anchor Protocol. Millions of UST were sold before the LUNA crash.
June: 3 Arrows Capital Bankruptcy
Just as the global cryptocurrency community was recovering from the Terra collapse, another event occurred when the cryptocurrency firm 3 Arrows Capital (3AC) went bankrupt in June. 3AC was affected by the knock-on effect of the Terra LUNA fallout. By the end of the month, the cryptocurrency market had shrunk to billions from trillions, and Bitcoin saw another major dip at $17,000.
In the NFT field, the Move-to-Earn web3 lifestyle app STEPN gained attention by launching several NFT-oriented programs. After achieving 500,000 followers on Twitter, STEPN gave $1.5 million worth of NFTs, including 50 pairs of BNBChain Genesis Sneakers.
July: Elon Musk Bids to Acquire Twitter
In July, there was a major development on the cryptocurrency Twitter front, as Tesla CEO and billionaire Elon Musk announced a bid of $44 billion to acquire the platform. In other metaverse news, Walt Disney unveiled its first new cruise ship, the Disney Wish, which features an interactive space that combines the physical and digital worlds to create a space for the metaverse.
August: Hacks and Partnerships in the Crypto Industry
August saw many significant events in the cryptocurrency industry, including a hack of crypto startup Nomad that resulted in the loss of over $200 million. In response to the hack, Nomad announced that it offered hackers a bounty of up to 10% to retrieve user funds. In a separate incident, almost 8,000 digital wallets linked to Solana were exploited, and $5.2 million in coins, including SOL, were drained.
There was also news of a partnership between Coinbase and American investment company BlackRock, which would allow the latter to provide institutional clients with access to Bitcoin. Additionally, Singaporean cryptocurrency company Hodlnaut halted withdrawals, swaps, and deposits due to poor market conditions.
September: Launch of Ethereum Proof of Stake (PoS) Merge
One major event in the cryptocurrency industry in September was the Ethereum proof of stake (PoS) merge launch. Before this, Ethereum utilized a proof of work (PoW) consensus mechanism. The merge involves the original Ethereum Mainnet joining with a separate proof of stake (PoS) blockchain known as the Beacon chain, resulting in one combined chain. The merge also significantly reduces the energy consumption of Ethereum by 99.95%.
There were also exciting developments in the NFT sector, with the launch of PUMA Metaverse sneakers and NFTs. The NFT collections were unveiled during New York Fashion Week as part of PUMA's metaverse project, Black Station. Additionally, the Doodles NFT collection raised $54 million at a valuation of $704 million, despite the overall slump in the cryptocurrency market.
Unfortunately, the market maker Wintermute was hacked for $160 million. The hackers exploited a flaw in Profanity's algorithm and targeted users' private keys.
October: Changes at Twitter and Increase in DeFi Protocol Hacks
October saw Elon Musk complete the acquisition of Twitter for $44 billion and implement significant changes to the platform. Musk initially fired several top executives at Twitter, including CEO Parag Agrawal, CFO Ned Segal, and head of legacy Vijaya Gadde.
On-chain data tracker Chainalysis reported that October was the worst month for DeFi protocol hacks in 2022, with nearly $718 million stolen during the month alone. In addition, Credit Suisse bank announced a restructuring of its strategy, including a focus on execution risk in order to achieve a more integrated economic goal for its shareholders.
November: FTX Exchange Collapse and Layoffs in the Crypto Industry
The month of November brought a major setback to the cryptocurrency market with the collapse of the FTX exchange, which caused the prices of major cryptocurrencies to drop significantly. The fall of FTX was due to bankruptcy, as its founder, Sam Bankman-Fried (SBF), used billions of FTX tokens from customer funds to compensate for investment losses at Alameda Research. As a result of the collapse, Bitcoin hovered around $15,000 and has continued to decline as of the writing of this article.
There were also widespread effects from the FTX fallout in the cryptocurrency industry, with most news stories and Twitter comments related to the event. In addition, some crypto companies laid off employees due to the impact of FTX's collapse.
December: SEC vs. Ripple Lawsuit and Increase in Scam Tokens
In December, Bahamas police arrested Sam Bankman-Fried after US prosecutors filed criminal charges against him. He is reportedly out on $250 million bail. A report by cryptocurrency market integrity platform Solidus Labs found that hackers used more than 117,629 scam tokens on-chain in the first 11 months of 2022, representing a 40% increase compared to the previous year.
There were also updates in the ongoing SEC vs. Ripple lawsuit, with both parties submitting their final submissions and the final result set to be announced in 2023. The presiding judge in the US court also ruled against the SEC's attempt to hold onto documents related to former Division Director William Hinman.
Conclusion
2022 was a challenging year for the cryptocurrency industry, with more setbacks than successes. While many investors are hopeful as we enter 2023, some experts predict that the cryptocurrency market may experience another dip. However, the metaverse, NFT, and DeFi sectors continue to grow, with many companies exploring opportunities in virtual realities and the blockchain industry.
