The cryptocurrency market in 2022 was marked by some serious scandals which, unfortunately, undermined the positive features like innovation, new utilities and use-cases.
Key events that everyone even outside crypto will definitely remember are the crashes of Terra/Luna and FTX. As a collateral damage, big names like 3 Arrows Capital, Voyager, Celsius, BlockFi, Genesis and others went down as well. Now we have some FUD wandering around Binance, Crypto.com, Gate and Kucoin. The whole market is eager to see how this will roll out.
The general health and direction of the cryptocurrency market is analyzed by following the numbers of total market capitalization, the volume of trading activity, and the prices of major cryptocurrencies. Overall crypto market capitalization is $837bn.*, and is down more than 56% compared to the beginning of this year ($1.9tn.**). The average trading volume is $38bn.*, and is down more than 56% from $89bn**. The price of Bitcoin is $16,888.52* on Bitlocus exchange, that is more than 59% less than in January 2022 ($41,114.42**). We see similar trend with Ethereum, priced $1,233.99 EUR* lately and down more than 59% from $3,054.66** in January. The year closes with many big players going down and crushing the trust on the market. Crypto influencers are split between calling the bottom and waiting for further capitulation. The year of 2022 will be remembered as the year of crash or survival, forcing the still-standing businesses to review their financing, products, and risk management tools. The layoffs mounting 20-50% of the staff is seen industry-wide.
On a much more positive note, we had a bunch of interesting developments related to crypto mass adoption and use cases for NFT technology. Both Visa and Mastercard are working on ways to handle the mechanics of crypto payments themselves. Central banks are building their own CBDCs (Central Bank Digital Currency). NFT-ticketed conferences are announced for 2023.
When we talk about mass adoption, it is impossible to leave the regulation aside. From Europe to Australia, the governments are working on legal frameworks to tame the bad guys who use gray zones to deceive investors or transfer illegal funds. The Markets in Crypto-Assets Regulation (MiCA) proposed by the European Commission is the first effort to cover all possible aspects under one legal document.
Despite all the downturns, crypto is here to stay. Let’s hope that only valuable, honest and transparent market players will prevail after all misfortunes brought by 2022.
*Average from the period 25 Nov - 23 Dec 2022
** Average from Jan 2022