New Year’s eve is when we all tend to look back at the failures and achievements of the last 12 months. There’s no denying that 2022 has been an absolutely action-packed year for the crypto industry, with the market witnessing a slew of disasters that have shaken investor confidence to a large degree. While several major crypto entities took a fall this year, there were also some positives to emerge among all the madness. So, let’s take a look at some of the major stories that hit the airwaves.
Canadian truckers employ crypto to circumvent sanctions against them
The Canada Freedom Convoy march, which saw a series of protests and blockades against the nation’s manifold COVID-19 vaccine mandates and restrictions, resulted in implementation of the Emergencies Act earlier this year. As a result, the Trudeau government got the right to invalidate/freeze the bank accounts of protestors without prior warning, forcing many of these people to start using cryptocurrencies to facilitate their day-to-day monetary transactions.
Ukrainians rally support of the digital asset community
The ongoing Russia-Ukraine war, which started in early March, has taken a massive toll on the global economy, with the effects of the war not sparing the crypto market. However, since the onset of the invasion, digital currencies have been used by the Ukrainian government to help accumulate support. In this regard, the nation’s foreign minister shared two wallet addresses — one for Bitcoin and the other for Ethereum — which collectively mustered $64 million from good samaritans across the globe.
Biden proposes new stringent crypto regulations
To bring more clarity to the American financial ecosystem, US President Joe Biden ushered in a host of directives ordering federal agencies to devise a new comprehensive crypto regulatory framework. This initiative aims to bring more clarity to the rules of using digital assets within the nation’s borders.
Defi’s weaknesses continue to come to the forefront
Initially hailed as the answer to the centralized banking system, the decentralized finance (DeFi) market was hit with many hacks and scams this year. One of the most important ones was the Ronin Bridge hack, which saw miscreants make their way with over $550 million thanks to a small exploit in the system’s smart contracts.
As per reports, the entire ploy was orchestrated by the North Korean state-sponsored Lazarus Group. In fact, nobody knew of the compromise till about a week later, leading many experts to claim that the DeFi market needs to straighten its security game. Another incident of 2022 relates to the Harmony Network, which was hacked to the tune of $100 million.
Terra collapse triggers crypto contagion
One of the most significant implosions of the year was that of Terra, a once top-10 project thanks to its high-cap crypto ecosystem driven by the native algorithmic stablecoin UST. The downfall resulted in the market facing significant volatility, which, in turn, caused the insolvency of several established projects such as Celsius, 3AC (Three Arrows Capital), Vauld, and Voyager Digital.
Tornado Cash ban triggers the ire of the global crypto community
During Q3 2022, the US Treasury’s Office, in conjunction with several popular crypto trading platforms, issued sanctions against the now-defunct crypto mixing service Tornado Cash. In fact, the project’s core developer Alexey Pertsev was taken into custody for simply designing a platform used by bad actors.
The episode was bizarre, as this was the first time a federal agency sanctioned an open-source project. Not only that, but it also called into question the crypto sector’s ability to prevent government-imposed censorship.
FTX bankruptcy causes investor confidence to plummet to all-time lows
Sam Bankman Fried single-handedly maligned the reputation of an entire industry when his crypto exchange FTX — once the second largest trading platform in the world — was involved in several shady deals with sister company Alameda Research, resulting in the firm’s valuation dropping from $32B to almost nothing at all within a matter of days.
Ethereum’s highly awaited PoS transition concludes
The Merge finally occurred on Sept 15 after years of apparent delays. Following the event, the ETH ecosystem transitioned from its energy-intensive proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one, allowing the project to reduce its energy consumption needs by a whopping 99.99% while also enhancing its transition efficiency.
Will the bottom-hitting 2022 market lead to the 2023 bull cycle?
While we cannot forecast the future, especially in such a volatile market, hitting the bottom in the crypto market is always expected to be followed by a bull market. The positive outlook for 2023 is bolstered by the fact that the industry has managed to weather the storm and turned out to be strong enough to show signs of recovery.
We expect the industry to face more security initiatives and the users to become more demanding over the next year. We wish new crypto market entrants to be drawn to the space with the assurance of increased liquidity and transparency, potentially leading to global crypto adoption.