(Newswire.net — December 26, 2022) — 2022 was a year that will be remembered in the crypto industry for a long time to come. There were many tumultuous events that made headlines, but also a number of positive developments that marked crypto’s increasing maturity.
Let’s take a look back at 8 of the most impactful events in the crypto industry in 2022, starting in January and ending in December.
1. Crypto Winter
Bitcoin may have been introduced in the wake of the 2008 financial crisis, but the crypto industry has existed in a low-interest-rate environment ever since. That all changed in late 2021, when central banks around the world began raising interest rates to fight inflation.
A risk-off shift in the global market threw the industry into what many industry insiders are calling a “crypto winter.” Since January 1, Bitcoin has lost around 65% of its value.
Some analysts predict that the crypto winter could last several years.
2. Stolen Bitfinex Coins Recovered
The US government made headlines when it announced in February that it had recovered 119,756 Bitcoin that was stolen from the crypto exchange Bitfinex in 2016.
At the time, the hack was one of the most significant security breaches in the crypto world. The coins were worth $72 million in 2016. When they were recovered this year, they were worth $4.5 billion.
The culprits were Ilya Lichtenstein and Heather Morgan, a married couple. The two were arrested by the US government and charged with the hack.
3. Axie Infinity Hack
Axie Infinity, the popular play-to-earn crypto game that had more than 2.8 million active players at its peak, suffered a $620 million hack in March. The hack was carried out by a North Korean cybercriminal group known as Lazarus and targeted the Ronin bridge, a link between the Ethereum blockchain and the Axie Infinity sidechain.
Axie Infinity’s governance token, AXS, has lost roughly 90% of its value since the hack and the game’s monthly users have dropped to 470,000.
Just a month before this hack, $300 million in crypto was stolen from a similar bridge on the Solana blockchain.
4. Explosion in Crypto Gambling
There was no single event that brought crypto gambling into the headlines in 2022, but it was one of the most impactful trends of the year. A number of new crypto casinos and sportsbooks launched this year, including Lucky Block, Metaspins, and Hell Spin.
Even as the overall crypto industry suffered, interest in crypto gambling grew steadily. In the first quarter of 2022, the amount of crypto spent gambling on bitcoin casino sites more than doubled from the same period in 2021.
This growth is especially impressive considering that major metaverse projects – many of which include virtual gambling venues – have lost users during the crypto winter.
5. Terra Luna Collapse
The collapse of the TerraUSD stablecoin in May 2022 caused an earthquake in the crypto industry. Terra was an algorithmic stablecoin that lost its peg to the US dollar, sending its companion token, Luna, into freefall. Within the span of 5 days, Luna lost 99.9% of its value and eliminated an estimated $60 billion in crypto wealth.
Terra Luna’s collapse dramatically accelerated the crypto winter and precipitated the collapse of the Three Arrows Capital crypto hedge fund. That collapse in turn led to the bankruptcy of Voyager Digital and Blockfi, both of which had lent money to Three Arrows Capital.
6. Tornado Cash Sanctions
In August, the US government announced that it would sanction Tornado Cash, a crypto project built on the Ethereum blockchain that enabled money to be sent in complete anonymity. Tornado Cash was used to cover the tracks of the hackers behind the attack on Axie Infinity and was suspected of being used by other cybercriminal organizations.
The sanctions sent a strong message from regulators that complete privacy in the crypto industry would not be allowed.
7. Ethereum’s Merge
One bright spot in an otherwise difficult year for the crypto industry was Ethereum’s Merge. The world’s largest blockchain switched from proof-of-work to proof-of-stake validation without even pausing transactions.
The Merge was the culmination of years of decentralized development and led to an immediate increase in Ethereum’s speed. The switch to proof-of-stake also slashed Ethereum’s carbon footprint and led to the initiation of staking rewards for ETH, the world’s second most valuable token by market cap.
8. FTX Collapse
2022 ended with a bang: the collapse of crypto exchange FTX and the arrest of its founder and CEO, Sam Bankman-Fried.
This is an event that will almost certainly be scrutinized in the crypto world for many years to come. Prior to the collapse, FTX was the second-largest crypto exchange in the world behind Binance.
FTX gave users’ funds to its Alamada Research, a hedge fund also owned by Bankman-Fried. When Alameda Research lost significant sums of money as a result of bad bets, FTX became insolvent.
Bankman-Fried has now been charged with fraud and FTX is in bankruptcy. The losses are still being tallied, but it is estimated that as much as $2 billion in client funds may be lost.
Looking Forward to 2023
2022 was a year that many crypto investors will remember for its dark moments, but it also had several bright spots. Going into 2023, the industry still has to contend with the crypto winter and it is possible that there will be more fallout from FTX’s collapse.
However, many analysts are optimistic that 2023 will be the beginning of a broad recovery for the crypto industry. If 2022 was any guide, no matter what happens next year, it will be exciting to watch.