Crypto Investors Market Analysts and traders have been on an emotional roller coaster ride in the year 2022, with major declines in valuations and numerous criminal activities.
It was an important year for cryptocurrency in 2017. Despite a promising start that suggested the possible mainstream adoption of blockchain-related businesses, things eventually became difficult and hurt the industry’s reputation.
Investing News Network (INN) has compiled a summary of the key events that shaped the crypto investment landscape in 2022.
Determining Factors of the Crypto Sector in 2022
When asked to put a word to cryptocurrency’s story in 2022, Alex Tapscott, Director of the Digital Assets group at Ninepoint Partners, told INN that it would not be “volatility.” “I would say that 2022 was a year that began with high expectations for Web3 and cryptocurrency as an asset class, and ended with some soul-searching by the industry,” He stated.
Industry insiders agree that the hopes have not been completely dashed, but they have been affected in a number of ways over the last twelve months.
Nick Kuriya, Vice President and Head of Crypto at Purpose Unlimited, told INN in 2011 that the DeFi ecosystem seemed to be in a good position for success. “There was a lot of optimism…unfortunately by the summer a lot of that had faded, but there were changes in the macro environment that contributed to that,” He stated.
In addition, Elliot Johnson, Chief Investment Officer and Chief Operating Officer at Evolve ETF, informed INN that although the cryptocurrency market has experienced bearish conditions, other sectors, including stocks, have also seen downturns.
Interestingly, a rise in the adoption of more sophisticated investment trends in cryptocurrency markets has been observed. Johnson said that companies are beginning to learn from larger industries when it comes to business strategy.
“Because all of these were seen as risky assets…and just as the stock markets sold off, crypto assets sold off as well, they just did more,” He continued. “I think over the past summer, we’ve seen that correlation again.”
Peter Eberle, President and Chief Investment Officer at Castle Funds, reported that despite the bearish cryptocurrency market, he has been pleased by the level of interest shown to him by mainstream investors.
According to him, institutional investors were the ones that helped the crypto market recover after it experienced a severe downturn in 2018. “Sniffing around the edges,” they eventually chose to stay away. But now, he can see the changes in the world.
“We know of a lot of institutions that are actively looking to build capacity in this space,” Eberle said.
On the brighter side, despite all the scandals that have rocked the cryptocurrency market, there are some positive developments. Fidelity Investments has launched a trading platform that provides commission-free cryptocurrency trading.
Tapscott said that he was impressed by the performance of the most famous cryptocurrency, Bitcoin, in the face of all the challenges of 2022.
“As an investor, I think now is an incredibly compelling time to allocate to the (digital) asset class. I am frankly surprised at how resilient Bitcoin has been in the face of the barrage of negative news,” He stated.
Growing Confusion as Crypto Market Scandals Continue
The year 2022 will be remembered for two major cryptocurrency scandals that further worsened the negative sentiment. There was a lot of bad news about cryptocurrency.
The most prominent of the year was FTX, a cryptocurrency exchange company that was well known for its trading platform and flashy advertisements.
“For many of the new digital asset users, new digital asset holders and Web3 users, the collapse of FTX is a harsh wake-up call,” Tapscott said in a statement about how the company fell from grace.
FTX was a major player in cryptocurrency trading, and its demise had far-reaching consequences. The firm had developed a platform that allowed users to trade crypto assets faster than any other investment platforms.
“I think a lot of people learned some lessons about centralized exchanges and centralized places of business, anywhere that has a real middleman,” Eberle said.
In November, following a CoinDesk report, FTX was confronted with questions about its liquidity. Although the company attempted to buy time by merging and buying Binance, a competitor, the final result was a total collapse of FTX, its leader Sam Bankman-Fried.
FTX was found to be
This year’s cryptocurrency market had a tumultuous ride, with unexpected events and major losses. One of the most significant incidents was the collapse of the FTX network, which caused the destruction of over $60 trillion worth of digital assets. Additionally, the LUNA token also had an impact on the space’s overall stability.
Despite the chaos, there was a major win for the markets – the successful Ethereum merger. The validation system for the network was changed from proof-of-work to proof-of-stake, which is believed to have a lower environmental impact. Furthermore, the move was made to provide greater security for larger investors.
In the end, investors were presented with an opportunity to reflect on their current position and long-term perspective. They were also encouraged to learn more about how to protect their own assets, rather than relying on intermediaries.
In conclusion, this year has been a rollercoaster for cryptocurrency markets. However, the Ethereum merger marks an important point of growth and investors should take this as a learning experience.
