10 Big Incidents of Crypto in 2022
Even though the crypto industry has advanced significantly in recent years, 2022 was proved to be an exceptionally turbulent year. That is because the crypto sector had to deal with a number of difficulties, from regulatory barriers to hacking incidents.
After the crypto explosion in 2021, the market value has been steadily declining since its height of around 3 trillion at the start of the year. FTX, LUNA, and other well-known firms went bankrupt amid the challenging scenario of a global financial crisis and epidemic.
The value of the cryptocurrency market has fallen as a result of numerous large-scale black swan incidents. The system has suffered greatly as a result of Bitcoin’s sharp decline below $15,000.
Yet some bright beacons were observed. Earlier this year, Ethereum eventually made a transition from PoW to PoS, laying the groundwork for future growth. Some crypto networks were blended to provide high-quality services.
More regulated measures brought on by 2022 bitter crypto bankruptcies to enforce the crypto platforms to guarantee better protection and transparency obligations. A case in point, consider what a solidly secured mechanism is taken by Cryptal.global to guarantee immensely lucrative profits for staking crypto.
Some people claim that 2022 will go down in history as the worst year for cryptocurrencies, but this is just one more instance of the repetitive cycle that has shaped this ground-breaking technology. The 2022 crypto winter is akin to the 2014–2015 slowdown, although it was still a long way ahead from the market bottoms in 2018–2019 and 2019–2020.
But the real nub of the matter is, despite all of these roller coaster rides, the industry held up well and kept developing. In case you are intrigued to get to the bottom of 10 big incidents of crypto in 2022, stay tuned until the end.
Cryptocurrencies have a lot to overcome in 2022, from global macro issues to “black swans” events like the big crypto crash of the Terra ecosystem and the collapse of the FTX exchange. In the following, you will find out the big events that took place in each quarter of the 2022 calendar year.
Big incidents in Q1 2022
At the beginning of 2022, the crypto market was already in decline, with NFTs being one of the few exceptions of good-performing assets.
• ATH For The Market Of NFT:
With the help of OpenSea and Bored Ape Yacht Club, NFTs attained a peak volume of trade of $17B in January.
• The Russian-Ukrainian War Intensified:
The Russian-Ukrainian conflict flared up again in February, having a considerable effect on the global economy. Yet, one of the main benefits of cryptocurrencies, neutrality, was fully revealed amid this conflict. In order to bypass sanctions, bitcoin was utilized to be donated to both Russia and Ukraine.
• Biden signed the Crypto Executive Order and the U.S. imposed sanctions on Tornado cash:
President Joe Biden urged the Federal Reserve to look at the possibility of developing their own cryptocurrency in an executive order on the government’s regulation of cryptocurrencies that was released in March.
Yet, it did not end up there as The Tornado Cash Protocol was put on the sanctions list, according to a statement announced on August 8 by the Office of Foreign Assets Control of the U.S. Treasury Department.
Users can hide their on-chain transaction records with the aid of Tornado cash, a Privacy Protection Agreement. The department revealed that Tornado Cash was allegedly used as a mechanism for money laundering by cybercriminals, especially hackers who North Korea backed up.
• $550 million lost in the Ronin Multi-Chain Bridge hacking attack:
One of the worst hacking attacks in the history of the cryptocurrency industry occurred in March when the Ronin multi-chain bridge was penetrated. The damage reached around USD 620 million.
But that was not the only case, as 2022 was a year full of cybersecurity threats. In 2022, the significant losses brought on by hacking attempts and protocol flaws approached $3 billion, up from $1.55 billion in 2021 and just $250 million in 2020, as per the information provided by the Blockchain security firm PeckShield. In the list of cryptocurrency events in 2023, perhaps there won’t be any more hacking attacks.
Big incidents in Q2 2022
The Defi market is a miserable scapegoat when problems arise, as both internal and external issues can influence cryptocurrency. That is what predominantly occurred in the second quarter of the year.
• The Terra LUNA Collapse:
The demise of LUNA and its stablecoin TerraUSD(UST) sparked a $40 billion market crisis in April and May. Three Arrows Capital, a cryptocurrency hedge fund, and its creditors, most notably Voyager and BlockFi, were brought down by the collapse of the first domino. The entire value locked in DeFi decreased by more than 50%.
In the Crypto crash of 2021, the demise of earlier algorithmic stablecoins, including Iron, the stablecoin of Titan in 2021, should have taught the lesson the hard way revealing the extent of the fragility and unreliability of this technology.
These uncollateralized digital assets are erratic and prone to losses since they try to peg the price of a reference property using fiscal engineering, algorithms, and market trading.
Large and flourishing platforms are not necessarily stable. At its height, Terra had over 100 future dApp releases, innumerable partners, and about $29.09 billion TVL. But it was even incapable of preventing the entire building from falling down. It brought the entire industry down. Perhaps it was better to call this the crash of the 10 biggest cryptocurrencies if the number of influenced cryptos reached 10.
• The FED began quantitative tightening:
The quantitative easing (also referred to as money printing) agenda of the U.S. Federal Reserve was a major factor in the preceding bull market. After printing $16.38 trillion or more, the FED made the decision to change course and implement a “quantitative tightening” strategy, which led to the sharp rise of interest rates in order to decrease the amount of money in circulation. That is the reason why there has been a global bear market in full swing since June.
Big incidents in Q3 2022
Magor business did not miss the opportunity to enter the industry as governments increased regulatory oversight, and the cryptocurrency sector was ready to bounce back from its failures.
• E.U. Started to Regulate Digital Assets:
European legislators reached a consensus on the Markets in Crypto-Assets (MiCA) regulation in late June or early July. This was the European Union’s initial effort to set up a thorough regulating structure for digital assets in the area.
• Coinbase Partnership with Blackrock and Google Cloud:
Unrelated or not, BlackRock, one of the early suspects in the Terra crash, revealed its intentions to introduce products that will ultimately enable investors access to the cryptocurrency market. BlackRock, meanwhile, instantly denied any involvement in the LUNA/UST collapse.
Being referred to as one of the biggest asset managers in the world, BlackRock collaborated with crypto exchange Coinbase in August 2022 in an attempt to be beneficiary to both Wall Street and the crypto economy.
Even on October 11, 2022, Google and Coinbase announced a second, equally intriguing agreement that will let some consumers pay for cloud services using cryptocurrencies.
• The Great Merge:
The switch from Proof-of-Work (PoW) to Proof-of-Stake( PoS) on Ethereum’s Blockchain was one of the longest-awaited events in the cryptocurrency world.
The so-called “Merge” was hopefully finished on September 15, 2022, cutting Ethereum’s energy usage by around 99.95%. Notwithstanding being the most significant crypto update of the decade, the price of ETH is still somewhat overlooked.
Crypto works on the basis of Blockchain technology, and in the beginning, its sole users were high-tech people eager to contribute to the upcoming upgrade. But a major part of price movement these days is driven by hype.
However, one of the most important technological advancements in crypto is the reduction of energy use. It will be the foundation upon which any upcoming actual DeFi developments will be built.
After expressing their hostility toward crypto in 10 years, more and more governments, organizations, and corporations have already embraced cryptocurrency. Although prices are falling, crypto is still a viable option as the big goats are getting involved.
Big incidents in Q4 2022
An unprecedented economic trend began to appear right around the end of Q3. Investors began buying Bitcoin in an effort to maintain their purchasing power when the value of the Euro and the Pound quickly dropped.
This is one of the most outstanding bitcoin events that was unprecedented in the latest crises in 2020 or 2021.
There were encouraging developments for new collaborations and acquisitions that could hasten the widespread use of cryptocurrencies. The bear market seemed to be coming to an end.
Even those who had struggled all through the winter of 2022 up to that time were eager to assist. However, what actually happened was not what was anticipated.
• Elon Musk’s takeover of Twitter:
Elon Musk purchased Twitter for $44 billion on October 27, 2022, making it one of the biggest purchases of the year. Memecoins like DOGE and SHIB increased in value while big crypto goats like Binance contributed $500M in investment.
For the crypto market, Elon Musk’s acquisition of Twitter has been considered to be a positive move. It is widely believed that his possession of Twitter will lead to further collaboration with crypto technology, promoting a prevailing positive attitude in the crypto world.
Musk is well-known in the cryptocurrency community and has been recognized for advocating for the development of coins like Dogecoin.
Additionally, he suggested that Twitter might eventually use cryptocurrency by integrating Dogecoin and putting more of an emphasis on cryptocurrency payments. Future promotion and deployment of cryptocurrencies may be positively impacted by such events.
• The crash of FTX and the lost liquidity
Due to insufficient liquidity and improper money management, FTX crashed, which was proceeded by massive withdrawals of investors.
FTT, the native token of FTX, underwent a sharp decline in value on November 9, which caused other coins, like Ethereum and Bitcoin, to drop to a two-year low. This collapse had a ripple effect on other exchanges, such as BlockFi, which filed for bankruptcy on the final days of November.
There are only a handful of market makers who control the crypto market, namely Wintermute, Amber Group, B2C2, Genesis, Cumberland, and the now-dissolved Alameda.
But on November 11, Alameda Research and roughly 130 other FTX group companies filed for bankruptcy in the United States due to a “liquidity crunch.” The collapse of one of the biggest market makers has damaged the liquidity of the entire crypto market.
To warp it up, from earlier market cycles, it can be inferred that cryptocurrency always went through a sustained upward trend following each bear market. The halving of BTC, which occurred 456 days prior to the market bottom and was preceded by a gradual rise and a booming bullish sentiment, was one significant event in the previous bull markets.
Therefore, according to some analysts, the market could start to rise as soon as the upcoming year, especially when the following halving date will occur between February 2024 and June 2024.
Nevertheless, a worldwide recession might pose a major challenge in 2023, given the rising link between cryptocurrencies and traditional markets in previous months.
The crypto crash in 2022 has been inevitable since periods of significant downturns were anticipated in the existing market dynamic of cryptocurrencies. But hopefully, historical trends imply that a bullish phase will begin within 6–18 months.
It remains to be seen what will happen next for this industry. But it’s pretty evident that the world of cryptocurrencies is by no means monotonous. A savvy lion-hearted investor never forgets where the industry has evolved to reach here.
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